How To Get a Mortgage With No Down Payment

by Jay Calafiore

mortgages101If you’re like most people, putting together a 20 percent down payment on the purchase price of a house or condo can often be difficult.

But the good news is you can still get a mortgage. The not-so-good news is there may be some extra fees involved.

If you’re unable to come up with 20 percent of the purchase price, you may still qualify for a high-ratio insured mortgage insured by the Canada Mortgage and Housing Corporation (CMHC), Genworth Financial Canada, or AIG.

High-Ratio Insured Mortgage

Many first time home buyers find it difficult to come up the full 20 percent down payment required to get an un-insured mortgage.

Considering that would be $40,000 for a $200,000 – home you can see why.

If you don’t have that much saved, you can pay a bit more and get an insured mortgage with the assistance of one of the three organizations mentioned above.

You follow the same steps and processes that you would if you were getting a regular mortgage but you also get your mortgage insured by either CMHC, Genworth Financial Canada or AIG.

This provides protection for the lender and still allows you to buy your house.

Depending on how much you have saved, the extra fees can be up to 3.15 percent of the total mortgage. This fee is incorporated into your mortgage and you pay it off over a number of years.

No Down Payment

If you are a first time home buyer, you may qualify for a high-ratio insured mortgage that covers 95 percent of the purchase price and your bank will give you the remaining 5 percent down payment.

In order to qualify for this type of loan, you have to be able to show that you can afford your mortgage payments and any other costs associated with owning a home or condo such as property taxes, condo fees, and utilities.

CMHC and Genworth Financial Canada will not allow you to spend more than 32 percent of your gross income on home or condo related costs.

It’s a good rule of thumb in general not to spend more than 30 percent of your gross income on home related costs.

In addition, if you have credit card debt or any other debts, these organizations won’t let you spend more than 40 percent of your total household income on your debt and your housing costs combined.

While the “no down payment” option allows many first time home buyers to afford a property that would otherwise be unattainable, there may be risks involved depending on your situation.

The Truth About the “No Money Down” Mortgage

FREE Email Course: Zero to Mortgage Pre-Approval

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Is A Variable Rate Mortgage Right for You?
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{ 32 comments… read them below or add one }

1 amana July 25, 2012 at 7:39 pm

first time home buyer.
no down payment
have a full time job
owe student loan $12,000 left $279 month payments
personal debt 15,000 (can pay anytime)
would like to purchase a condo up to $400,000

2 ashley February 16, 2013 at 9:33 pm

my husband makes 37000 a year,we have no downpayment,we own our truck (2008 model) in debit 2 creidt cards total…5000….do we even have a shot at owning our own home????

3 Lynn July 11, 2013 at 2:09 am

I’ve been trying to purchase a house but can’t swent for a down payment, what option do I have versus rentin

4 Jay Calafiore July 11, 2013 at 5:26 pm

Thanks for the post Lynn. You can try and qualify for a cash back mortgage or maybe you have family that can Gift you 5% for down payment.

5 Pam July 12, 2013 at 4:48 am

Renting for a long time I pay almost $1200 a month for rent. Need to buy, have no down payment. Owe $9000 for my credit card and have a car payment. I make $55,000 a year plus some bonuses. Is it realistic for me to think I can get a mortgage?

6 Jay Calafiore July 16, 2013 at 3:24 pm

Yes its realistic. Click on APPLY NOW to fill out an application and i can let you know what you qualify for.

7 terri laking August 13, 2013 at 9:49 pm

My husband make 45000 a year and we are paying a 1000 rent month. We have a truck pymt of 500. We have no downpayment. Us it even worth trying for a mortgage

8 Jay Calafiore August 19, 2013 at 8:23 pm

Thanks for the comment Terri. It is always worth while looking to see what you can qualify for. Fill out an online application and we can discuss in more detail. Jay

9 ali August 23, 2013 at 10:11 pm

My credit score is 800+ and looking buying a house in Hamilton for $200,000. I dont have the 5% and need assistance for the interest rate 2.79.

RBC got now issue to provide me the mortgage due to excellent credit rating, hence 5%

10 Jay Calafiore August 26, 2013 at 4:45 pm

Thanks for the comment Ali. Are you able to get any family members to help you out with the 5%? if not then there might be an option for 5% cash back but the rates will be more like 4.85% to 5.14%. Thanks. Jay :)

11 Dorothy September 16, 2013 at 5:52 am

I have no down payment for a house not even 5%. between my husband and I we make 30,000 a year and owe 8000 on credit cards and 20,000 in student loans do we have a chance at getting a mortgage?

12 hala hanna November 18, 2013 at 4:21 am

if i don’t have a full time job but I have some downpayment could I still able to buy home ?

13 Judy Jones November 24, 2013 at 4:28 pm

I have an income of approx 85,000/year -no debts (just paid everything off – consumer proposal) but do not have any downpayment. currently paying rent of $1600 +. would I be able to qualify for a house purchase with no money down??

14 Jay Calafiore November 27, 2013 at 7:30 pm

Thank you for the post Judy. When it comes to 100% financing products, applicants require to have very good credit. If you just completed a consumer proposal then most likely you would need to show 2 years of re-establish credit.

15 Kayla butt January 2, 2014 at 3:55 am

Looking to buy a home no down payment. Can someone help me out?

16 sherry January 15, 2014 at 2:21 am

Do you have to be a first time home buyer to qualify for this.

17 Lloyd January 16, 2014 at 5:42 pm

I have an income of $ 83,200 per year plus CPP( I am 61 years old) early retirement of $ 8,088 per year totalling $ 91,288. my rent is $ 1025 per month I have a car payment of $ 398 per month and total credit card debt of $6,000. I have re-established my credit– I done a credit score a few months ago and it came to 676 from Equifax- I finished a consumer proposal about a year ago. Would I qualify to purchase a house with no money down?

18 Jay Calafiore February 4, 2014 at 3:07 pm

No you do not Sherry :)

19 Jay Calafiore February 4, 2014 at 3:09 pm

usually Banks and lenders would like to see minimum 2 years re-established credit after a consumer proposal or bankruptcy

20 Miroslav Rusev February 23, 2014 at 4:00 am

I am married with 2 kids. Renting for a long time we pay $1300 a month for rent. Need to buy a house(around 400k), have no down payment. Owe $15000 for my credit card and have a car payment. I make $90,000 and my wife makes $32000. Is it realistic for us to think I can get a mortgage?We have $5000 in RRSP.

21 Jay Calafiore February 24, 2014 at 4:31 pm

Thanks for the comment. It is definitely possible. i have emailed you directly. :)

22 Liliy March 4, 2014 at 2:50 am

I have a full time job and my husband, the only thing is we can’t afford to buy a house but do not have downpayment ,I’m paying 820 to my car ,10.000 credit card .do you think I can qualify with no income 50,000 & my husband 49,000.

23 meeh16 March 5, 2014 at 10:50 pm

husband earns $85K/year. I am currently not working. No debts, credit cards always pay in full by due date. Only have 10K as down payment, what are our chances of getting an approved mortgage?

24 Steph March 30, 2014 at 1:36 am

Hi there,
I am a single mom of 1 child. I own my current house since 2005. I earn $45,000 per year. I owe $3500 on Visa, $19,000 student loan, $19,000 Consolidated loan and $7,500 on a car loan. I want to rent out my current house which would provide a $500/month profit, and purchase a new house for $319,000, without a down payment. Do I have any chance???

25 Jordan March 31, 2014 at 12:57 am

I’m a first time home buyer and have about 3000 I can put down I make 50000 a year and so dose my gf I have no debt she has about 27000 in debt with student loan an a car payment just wondering if we could qualify for any mortgage looking to buy a house for 209000

26 rob April 8, 2014 at 9:29 pm

First time home buyer, currently renting 1300 a month, have no down payment . Only debt is care which is 35 k. I make around 65-70k a year and my wife once get back to work makes 45-50 k a year
Looking to buy a house around 350-450 k in calgary. Total credit card are 8500 dont owe anything on them and have very good credit. can you please email me some options
thank you for your time

27 Jill April 10, 2014 at 5:06 pm

Hi Jay,

Just to clarify, you mentioned the cash back portion of a cash back Mortgage, can be used for a down payment. I know not all banks allow this as it does not constitue savings.

My partner and I bring in about 75000.00 a year with debt of less then 8000.00…. we don’t have any savings though. What do you suggest aside from a possible cash back mortgage?

28 phoenix April 16, 2014 at 12:31 am

I stay home with the kids and my husband brings in 37,000.00. We own both our vehicles and the only “debt” is one credit card of $1500 limit. We have no money saved and have spent over $70,000 on renting (not including all the utilities which we also pay) the same home for six years..we need a place of our own. Any auggestions???

29 Rudy May 4, 2014 at 10:03 pm

I own a condo. I want to buy a house that it is currently a bed and breakfast. I have %5 for down payment. Can i find a mortgage? I am currently making $70000. Can sell my condo and move to NOL.i need some help please. Thank you

30 Jay Calafiore May 13, 2014 at 7:19 pm

Thanks for the post. Usually lenders and Bank require a minimum down payment of 30%-35% for Bed and Breakfast properties depending how they are zoned. Hope this helps :)

31 courtney June 18, 2014 at 8:13 pm

hello fiancé makes 50,000 , 8000 credit card debt car payment oof 400/month rent is 800/month and no down payment also first time home buyers do we have a chance at a mortgage??

32 Corey July 5, 2014 at 6:19 pm

I live in Toronto and currently pay $1050 for rent. $5000 credit card debt, own my own vehicle and have good credit. Looking to purchase something in the 200-250k range with no down payment. Is this even possible? If not, do I have any options at all?

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