Down payment is not to be confused with deposit.
- A deposit is needed first and is the amount you have to provide when your offer is accepted (within 24 hours) and is held in trust by the listing brokerage to be forwarded to your lawyer upon closing and applied towards your down payment.
- A down payment comes second and is the amount due (less deposit) on closing (the date you take possession of your new home) in order to secure the agreed terms of your mortgage. This is all done through your lawyer/mortgage representative and does not include any additional closing costs or lawyer fees. Always refer back to your lawyer for the final numbers required.
How much deposit do you need?
This amount tends to be approximately 5% of the purchase price or some even dollar amount close to that figure.
$700,000 purchase = (700,000 x 5%) = $35,000.
$1,000,000 purchase = (1,000,000 x 5%) = $50,000
$1,200,000 purchase = (1,200,000 x 5%) = $60,000
How much down payment do you need?
The following gives you a typical breakdown of a down payment required for home purchases. The structure is 5% for the first $500,000 and 10% on the remaining amount of purchase price. Please note that this is a guideline only and it is important to consult with a Mortgage Broker/provider for exact amounts for your circumstances. Contact us for an introduction to a top mortgage specialist.
For example, homes priced at the following amounts would require the following down payments:
$700,000 purchase = (500,000 x 5%) + (200,000 x 10%) = $25K + $20K = $45,000.
$1,000,000 purchase = (500,000 x 5%) + (500,000 x 10%) = $25K + $50K = $75,000
$1,200,000 purchase = (500,000 x 5%) + (700,000 X 10%) = $25K + $70K = $95,000
Remember, the amount of deposit is deducted from the amount of down payment you will need (less lawyer & other fees - for full details request a copy of our buyer package today - use the contact us form below or call!).
Deposit is needed to secure your offer on the property you are purchasing.
Down payment is required by your Mortgage provider who is loaning you the balance of funds to purchase your home.
Find an estimate of how much mortgage or rent you can afford - click here to access the affordability calculator.
Check out our 5 costly mistakes home buyers make.
We are here to guide you through the whole the process. Call today and see how the Ross Bridges Real Estate Team can help you 905-220-1848 or use this form to send us a message contact us.