5% Down Payment but CMHC... Worth It?

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u/Monopoly · Joined Oct 2024

If you plan to live in a property for at least a year, consider a down payment under 20%, as potential market returns could outweigh the cost of CMHC insurance.

Last update Oct 2024
  • Scenario 1: 5% Down & Invest 15%
  • Scenario 2: 10% Down & Invest 10%
  • Scenario 3: 20% Down

Mandatory CMHC insurance reduces your initial equity, but investing the down payment savings can eventually offset its cost. Use my other calculators to ensure holding the property long-term is advantageous, too.

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Due to mandatory CMHC insurance, putting 5% down increases the loan amount by 4.00%, which isn't going to your home equity, either. But in exchange, you save 15% down payment for investment into the market.

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