Solution: 5% down program features

• Financial institutions in Canada are only allowed to loan up to 75% of the value of a residential property. Loans beyond that require them to buy Mortgage Default Insurance (available only from two companies- CMHC and GE Capital). With this insurance, they can loan up to 95% of the value of the property - hence the 5% Down program
  
• Designed to bring more buyers into the market - of value to those with enough income to carry a mortgage but not a large down payment.
  
• Must put at least 5% down payment
  
• Purchase price of home has to fall within the maximum house price limit for the area in which you intend to buy ($250,000 -Greater Toronto, Calgary, Vancouver and Victoria, $175,000 in northern areas and other area where average house prices tend to be high, and $125,000 rest of Canada)
  
• Your monthly expenses amount to less than 32% of your gross household income
  
• Total debt ratio of 40% or less on your gross household income
  
• Home you buy has to be your principal residence
  
• Premium for use of program (insurance) is 3.75% of mortgage - for 5% down buyers -added on to the principal of mortgage but subject to Provincial Tax (in Ontario payable on closing)
  
• Available to all buyers (not restricted to first time buyers)
  
• 70% of First Time buyers have indicated that they could not have purchased a Home without the 5% down option. Although popular -consumers should be aware of the price tag.

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