VANCOUVER (NEWS1130) – As the price of property just keeps on climbing, more first-time buyers are tapping into family resources to make a down payment.
It’s all rosy right now, with interest rates so low; a survey from the Canadian Association of Accredited Mortgage Professionals says home owners are aggressively paying down their mortgages.
But when it comes to buying a first home, President Jim Murphy suggests rounding up enough money for a down payment has been getting tougher.
“Forty-five per cent of them have used savings — have saved up money towards the down payment. But 17 per cent receive either a gift or a loan from families, parents… that goes towards that down payment.”
Murphy points out many parents and grandparents are in a position to help, as the older generations often haev accumulated a lot of wealth, “in terms of the increased value of their properties. If they’re home owners, they would have paid off their mortgage.”
“There may be other investments that they have. So, it’s not necessarily that they have to take out any sort of loan themselves; they would have built up money themselves and saved over the years,” he adds.
About 10 per cent used the first time homebuyers plan, tapping into RRSPs to help with a downpayment.
The average down payment in Canada is 21 per cent on the purchase of a new home.