For owner-occupied properties above $500,000, what is the minimum down payment required?

For owner-occupied properties above $500,000, what is the minimum down payment required?

• A. 5% for the entire amount
• B. 5% for the first $500,000 and 10% for the excess
• C. 10% for the entire amount
• D. 15% for the first $500,000 and 20% for the excess

Answer: (B)

In Canada, for owner-occupied properties priced above $500,000, the minimum down payment structure stipulates that buyers must pay 5% on the first $500,000 of the property's price, and then 10% on any amount exceeding $500,000. This tiered approach is designed to help first-time buyers and those purchasing more affordable homes while also ensuring that buyers contribute a higher percentage for more expensive properties, which can pose more risk to lenders. For instance, if a property is valued at $600,000, a buyer would need to provide $25,000 as 5% of the first $500,000, and an additional $10,000 as 10% of the remaining $100,000. This results in a total minimum down payment of $35,000. The other proposed answers do not accurately reflect this tiered down payment structure for properties above $500,000, which is a critical aspect of Canadian mortgage financing practices.

In Canada, for owner-occupied properties priced above $500,000, the minimum down payment structure stipulates that buyers must pay 5% on the first $500,000 of the property's price, and then 10% on any amount exceeding $500,000. This tiered approach is designed to help first-time buyers and those purchasing more affordable homes while also ensuring that buyers contribute a higher percentage for more expensive properties, which can pose more risk to lenders.

For instance, if a property is valued at $600,000, a buyer would need to provide $25,000 as 5% of the first $500,000, and an additional $10,000 as 10% of the remaining $100,000. This results in a total minimum down payment of $35,000.

The other proposed answers do not accurately reflect this tiered down payment structure for properties above $500,000, which is a critical aspect of Canadian mortgage financing practices.