When you are purchasing a house for sale in Saskatoon you will need a down payment. This down payment can be partially paid for with the deposit that you also need when putting in an offer to purchase. The most common down payment needed is 5% unless you are an investor or purchasing a second home in which case you may need up to 20%. Your lender will determine what you need for a down payment so this is another reason to ensure you are pre-approved before getting too far ahead of yourself.
A conventional mortgage is where the buyer is required to put at least 20% of the purchase price or appraised value.
The smaller 5% down payment is considered a high-ratio mortgage. This is a higher risk mortgage for a lender therefore it requires default insurance.
The larger the down payment the greater the savings. A larger down payment means a lower amount of your monthly principal and interest payment and it also reduces the total amount of interest you pay over the life of your mortgage.
You may also be eligible to take advantage of the RSP Home Buyer’s Program which allows a first time buyer to take out up to $25,000 from RSP’s for the purchase of a home. The amount taken out must be paid back within 15 years and the minimum annual repayment is 1/15 of the amount withdrawn.
Some buyers can also borrow their down payment so ask your lender if you qualify for this program.