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(September 17, 2021)

Intro (pre-amble): up to 11:00 mark of podcast (Modern Monetary Theory, Canada’s inflationary path, and my thoughts on how to position yourself on the right side of a volatile economic environment)

Down Payment Sliding Scales:

Over the years down payment guidelines have inserted a component within the qualification criteria known as “sliding scale”. Oftentimes it could catch a buyer off guard when budgeting for a purchase leaving them scrambling for the unexpected shortfall in funds. The first bullet point below is the industry standard adhered to by all lenders in Canada, but the second bullet category varies with lenders and is scaled as per locations/regions and the lenders specific risk tolerances. For contrast, I’ve included the most competitive scales for Vancouver and Calgary.

Minimum down payment thresholds for Vancouver:

5% down payment up to $500,000 Purchase Price, then 10% on the balance that exceeds $500,000 up to $1M Purchase Price
EXAMPLE: for a $800,000 Purchase, the minimum down payment would be $55,000
20% down payment required for purchases between $1M and $2.5M, then 50% on the balance that exceeds $2.5M
EXAMPLE: for a $3.2M Purchase, the minimum down payment would be $850,000

Minimum down payment thresholds for Calgary:

5% down payment up to $500,000 Purchase Price, then 10% on the balance that exceeds $500,000 up to $1M Purchase Price
EXAMPLE: for a $800,000 Purchase, the minimum down payment would be $55,000
20% down payment required for purchases prices of $1M, then 60% on the balance that exceeds $1M
EXAMPLE: for a $3.2M Purchase, the minimum down payment would be $1.08M