0% down mortgages over?

[annof]

Are the 0% down mortgages over? I am very curious is it now possible to get a mortgage with 0% or 5% down? Any thoughts?

[trent]

I don't think any sane financial institution will offer 0% down mortgages in a real estate market that is rapidly going down. Look at the sales in major Canadian cities like Toronto, Vancouver and Calgary for example, and the picture is not pretty.

The Toronto Real Estate Board released their October 2008 report and the prices are down 13% year-over-year. Furthermore the sales declined 38%! This is an outright crash.

I think that in a very near future Canadian will find out that it's hard to get a mortgage even if you have 20% down. But who am I kidding, what percentage of Canadian homebuyers have 20% downpayment? The answer is close to none!

[Canadian]

The Canadian housing market just started crashing down, and I don't think this is a good time to buy. I'm looking to buy a property in Toronto, but I won't touch anything until the prices come another 30-40% down from here. many people think that this will never happen, but this is just a wishful thinking of homeowners who overpaid for their homes and will soon find out that they are underwater with their mortgages.

[bullish]

I'm sure you can still get a mortgage with 0% down in Canada. The reason for that Canada never had real estate bubble like the one US had (Ok with a few exceptions like Vancouver).

[trent]

Originally Posted by bullish

I'm sure you can still get a mortgage with 0% down in Canada. The reason for that Canada never had real estate bubble like the one US had (Ok with a few exceptions like Vancouver).

Well banks are stupid, but not that stupid. Just show me a bank in Canada that will give you 0% down mortgage now, when even the most stubborn home owners already admit that the prices are headed down. Let's assume that the prices will go down only 20% from current levels, this means that a homeowner with 0% downpayment (0% equity in the house) will be 20% underwater. If the bank has to foreclosure on such property it will have to sell it for 10-15% below market, so the bank will lose a minimum of 30% on this mortgage. I don't think any bank will like such a deal.

[dreamy]

I don't think you can get a mortgage with less than 20% down. With the credit crunch and all 0% down is ancient history...

[Canadian]

Originally Posted by dreamy

I don't think you can get a mortgage with less than 20% down. With the credit crunch and all 0% down is ancient history...

You still should be able to get a mortgage from Canadian bank if you have more than 5% down and with no more than 35 years of amortization. This might change soon though.

[bullish]

Originally Posted by Canadian

You still should be able to get a mortgage from Canadian bank if you have more than 5% down and with no more than 35 years of amortization. This might change soon though.

This might change soon, how?

[Steven]

I guess he was saying that some banks might refuse to give mortgages with only 5% down. To me 5% down seems like ridiculously low, and in my opinion a downpayment should be a minimum of 15%.

[MortgageOpolis]

Hello,

As crazy as it may be... 100% financing is available with a bit of a twist.
Some lenders are offering Cash Back mortgages up to 7%, but, the interest rate is higher for this product. The higher rate is how the lender gets compensated for lending you the Cash... you don't make a separate loan payment!
A Cash Back mortgage credits a borrower a percentage of the purchase price at closing which can be used as a down payment for the purcahase provided CMHC mortgage insurance guidelines are met.
Tip: You can withdraw up to $20,000 of your RRSP's tax free for a down payment if you haven't owned a home as a principal residence in the past 5 years. Contact me for more info. on this program.

Take care,

just apply we'll do the rest!