Why would they tell you to pound sand? Why would the bank give up 200k in interest profit from a condo that's being paid regularly? The downpayment rule is to try and get rid of speculaters. Any one can buy a house live in it for 6 months then turn it into a rental with only putting 5 percent down. When your mortgage renewal comes up if you don't refinance and get more money all you do is select a new term. They don't redo a whole new mtg application for the remaining period. If you were to change lenders you would have to requalify but if you stick to the same bank for your entire mtg they could care less what your downpayment is as long as you pay it.
We are not like the states where when your first term of your mtg comes due then everything hits the fan. I think there are a lot of misconceptions about mtgs out there
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