Quote:
Originally Posted by Table 5
And what happens when that 5 years is up and that interest rate has gone up 1.5-2 points? Chances are the buyer who only scrapped together 5% is going to be struggling hard. Not everybody is doing it as a savy investment...most people just want a home to live in.
I'm not saying you shouldn't buy a home...I'm just saying you should buy a home you can afford, and afford with some cushion. If you have 40k down, get the 400k starter home, not the 800k dream house.
I just went through a laughably hard mortgage approval process (forget down payment, try being self-employed AND having all your credit history be in another country), so I know unreasonable the process can be. But having said that, I'm glad Canada is not going down the "no credit no problem" route that happened in the US.
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That's not what you said. You said don't put down 5%, you are likely in over your head.
Just a quick calculation but a $315,000 mortgage (so let's say a a $330,000 starter home) at 3.5% costs $1,582.69 a month, which is basically as much as rent or less. Why wouldn't you buy this if that's what makes sense for you? Why save up another 15k to buy the same house when interests rates are so low?
I mean taking out a 25 year mortgage with 5% down when you're 40 doesn't make sense, but the above scenario seems to work?