Canadian Home Buyers Making Bigger Down Payments
Last updated on May 11th, 2021 at 01:11 pm
More and more Ottawa home buyers are putting large down payments on their home purchases, according to a recent article I was reading.
Evidently, some of Canada’s larger lenders are saying that they’re seeing a preferential shift toward larger down payments on home purchases.
But why exactly is this happening? We have the answers!
Ottawa Area Home Buying Trend
Generally speaking, average down payments are not usually publicly available. However, an executive at Royal Bank of Canada recently said that his bank has seen the average down payment increase by 10 per cent during the last two years.
This trend applies only to those mortgages that are uninsured, which are generally those where the down payment is greater than 20 per cent to begin with.
Meanwhile, the executive said that the down payments for the bank’s insured portfolio are also increasing. Insured mortgages are those where the buyer puts down less than 20 per cent.
So why is this happening? Here are some reasons that experts provided:
- Mortgage insurance premiums increased by about 15 per cent on average starting May 1. Thus, many home buyers may be seeking to avoid those rates.
- Additionally, buyers are saving more for down payments because of a number of factors, including improvements in income levels and employment rates.
- Culturally, buyers are being encouraged to save more, giving them added support for saving up for a large down payment.
Because of all this, at least one bank official said that the percentage of mortgages that have down payments of 35 to 40 percent has increased significantly.
Helping You Buy Your Next Ottawa Home
We would love to discuss with you further what your strategy should be when it comes to a down payment as well as help you find your next Ottawa dream home!
Until next time,