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Canadian Mortgage News
|Posted on May 13, 2013 at 10:02 AM|
A wide majority of first-time buyers-to-be plan to put down less than 20%, according to new data from RBC/Ipsos.
Here's the breakdown of their expected down payments:
Over half of newbie homeowners will likely pay the maximum default insurance premium to buy their home.* That maximum ranges from $2,750-$2,900 per $100,000 of purchase price (i.e., 2.75%-2.90%), depending on the source of down payment.
If home prices rise 2% a year (a rough rule of thumb for the long-term growth rate), buyers can easily make up that insurance premium in a few years. If prices drop, it's just one more thing that eats into their equity if they have to sell. ********* How long do young buyers expect to save for their first down payment?