How much of a down payment do I need?

There is no fixed dollar amount set for the amount of down payment you will need; rather, the down payment is a percentage of the total cost of the home. The size of the down payment you’ll need will depend not only on the price of the house but also on your financial and credit history, which will be checked by lenders when you apply for a mortgage.

First-time buyers can apply for Federal Housing Administration (FHA) loans, which require that you make a down payment of just 3.5 per cent of the home’s total value. However, if you can’t make a 20 per cent down payment, you should seriously reconsider whether or not you should buy a home. Not only will anything less than 20 per cent make your mortgage payments even larger, making a smaller down payment is also a good indication that you can’t afford to purchase a home right now.

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