Smart Home Buying: 10%, 20% or 30% Down?

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u/FirstTimeBuyer · Joined Oct 2024

Your down payment choice shapes your future! Discover how 10%, 20%, or 30% down payments can impact your net worth based on your investment horizon.

Last update Oct 2024
  • Scenario 1: 10% Down w/ CMHC & Invest 20%
  • Scenario 2: 20% Down & Invest 10%
  • Scenario 3: 30% Down & No Invest

When analyzing the net worth chart, pay attention to how CMHC insurance reduces immediate cash flow with lower down payments. Also, note that higher down payments adversely affect net worth growth. Choose wisely for your future!

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If you're using Cost Basis (cb) for calculating capital gains:

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How is Cash Value calculated?

With a 10% down payment, CMHC insurance increases your mortgage balance, lowering immediate cash flow. However, the 20% not used for the down payment is invested, offering potential growth that can outpace the short-term impact.

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(Expressions are evaluated at Year 0 only.)

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