With the recent announcement that the Federal Dept. of Finance has eliminated 100% financing, a few lenders are still offering a 5% cashback incentive (which provides for the 5% downpayment) provided that you accept their posted 5 year closed term (or longer). So, if you purchase a residential property for $200,000, the lender will provide the necessary 5% downpayment in order to qualify for CMHC/Genworth insurance.
Using today's 5 year posted rate of 7.20% and a 35 year amortization, the monthly payment is $1,265.05 per month (o.a.c.) for a mortgage amount of $195,985 (the CMHC/Genworth premium is $5,985 and is added to the mortgage.
For those of you renting and perhaps considering home ownership in the near future, but are finding it difficult to save for the downpayment, this could be a great alternative. Once your 5 year term is over, you can then qualify for the bank's best discounted rates for the balance of the amortization.
About Us
The Mortgage Centre - BC Direct Mortgages is owned by Ed Kolisnyk and Shannon Brolund, a father-daughter team working together since 2000. Our Mortgage Centre Kelowna brokers work for you, not the lenders, and are committed to providing you with the best available package of rates and features for your particular situation.
BC Direct Mortgages Inc. is an independent member of the Mortgage Centre Network. Please note that the information in this blog is for general information purposes only, and the rates and/or terms are subject to change without notice. The views or opinions expressed are the author's own and may not reflect the views or opinions of any of our lenders or any other source.