5% down payment question

dylancaharel

New Forum Member
REIN Member
May 25, 2018
5
2
3
21
#1
Hello everyone,
So I was informed but someone that you aren’t able to use the first time home buyer 5% down payment option on rental properties and that you can only use the 5% down on a house you will be living in. In not sure how reliable the source is so I’m seeking your input!
Thanks


Sent from my iPhone using myREINspace
 

CorySperle

Senior Forum Member
REIN Member
Sep 1, 2010
679
426
63
Edmonton
#3
It's not just for first time home buyers, but everyone as far as I know as long as you just have one. More than one individual I know personally has done very well by buying with 5% down, living there for a year, renting out, and buying another place at 5% and repeating several times.
 
Likes: Mitch 6711

Alvaro Sanchez

Ottawa-Gatineau Investor
Registered
Jun 5, 2009
943
136
43
Ottawa
AlvaroSanchez.ca
#4

Michel Lafleur

Frequent Forum Member
REIN Member
Apr 30, 2015
127
129
43
#5
I understand that you can buy an investment property with 5% down so long as its intended to be your primary residence for the foreseeable future. I know of many guys who bought their first doors that way, lived there a few years then moved on.
If you dont plan to live there, its tough to find a lender who will do it for anything less than 20% down for an investment property.
 

Matt Crowley

Senior Forum Member
Registered
Dec 14, 2013
864
366
63
Calgary
#6
Yep, 20% down minimum on a standalone investment property. The cool caveat is that if you buy a home a bit out of your price range with a legal suite the bank will count that income towards what you can afford and allow the 5% down. If you are young and mobile this is a great strategy.

When it comes refi time, the bank will need to see that 20% down however if you do a few of these which can happen from a combination of renovations, principal pay down, and market appreciation. Letting the principal balance tick away is one of the most awesome things in the world.
 

Matt Crowley

Senior Forum Member
Registered
Dec 14, 2013
864
366
63
Calgary
#8
^ unless the broker syndicated the loan across properties, probably not, and in aggregate would need to meet the 20% threshold.

Unless you are 20% down, you won't mean the DCR requirements anyway with pricing where it is at so it is a moot point.