Most people start here:

“How much do I need for a down payment?”

But after working with so many clients, I can tell you that’s not the real question.

The better question is:

“How should I structure my down payment so I don’t create pressure later?”

Because your down payment doesn’t just affect your approval.
It affects your monthly comfort, your flexibility, and your next move.

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Let’s Start With the Basics (But Keep It Real)

In Canada, your minimum down payment is:

• 5% on the first $500,000
• 10% on the portion between $500,000 and $1.5M
• 20% for properties over $1.5M

So yes, there are rules.

But what matters more is what happens after you choose your number.

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The Part Most People Don’t Fully Understand

Your down payment actually puts you into one of two categories, and this is where strategy begins.

When You Put less than 20% Down Payment

This is called a high-ratio mortgage or insured mortgages.

What that really means:
You’re borrowing more than 80% of the home’s value.

Because of that, lenders require mortgage default insurance.

Here’s how I explain it simply:

• The insurance protects the lender, not you
• You don’t pay it upfront
• It gets added to your mortgage amount

So your mortgage becomes slightly higher.

But here’s the part most people don’t expect:

These mortgages often come with better interest rates because they’re insured.

So it’s not automatically a negative. It’s just a different structure.

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When You Put 20% or More Down

This is a conventional mortgage.

Now:

• No mortgage insurance is required
• Your loan is 80% or less of the property value

It sounds like the “ideal” scenario, and in many cases it is.

But this is where I push people to think a little deeper.

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The Biggest Misconception: “I Need 20%”

I hear this all the time.

“I’ll wait until I have 20%.”

But what’s often missing is the bigger picture.

While you’re waiting:

• Prices may increase
• Opportunities may pass
• Your timeline may shift

So the real question is not:

“Is 20% better than 5%?”

It’s:

“What position do I want to be in after I buy?”

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Where Your Down Payment Can Come From

Another area where people limit themselves unnecessarily.

Your down payment can come from:

• Savings, Chequing, Investments: Any cash down payment needs a 90-day history. That means providing bank statements showing the funds have been in your account, along with your name and account number to confirm ownership.
• Gifted Down Payment from a direct family member: Gifted down payments from family must be a true gift, not a loan. There can’t be any expectation of repayment. We’ll provide a simple letter for both sides to sign confirming that the funds are non repayable.
• RRSP (Home Buyers’ Plan)
• Equity from another property: Borrowed down payment funds must come from equity in an existing property if there is enough equity available in the existing property. We’ll need mortgage statements to confirm there’s enough available equity.
• Sale Proceeds: If you’re using funds from the sale of your current home for your down payment, we’ll need the firm sale agreement, your mortgage statement, and proof the funds are deposited. If your sale closes after your purchase, bridge financing can help cover the gap.

This is where strategy really matters.

Because it’s not just about gathering funds.
It’s about how you use them without putting yourself in a tight position.

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The Emotional Trap No One Talks About

People treat the down payment like a finish line.

“I just need to get there.”

But it’s actually the starting point.

If you stretch everything just to hit that number:

• You may feel financially tight after closing
• You lose flexibility
• You create stress instead of stability

And that’s not the goal.

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A Smarter Way to Think About It

Instead of asking:

“What’s the minimum I need?”

Ask:

“What structure gives me the strongest position after I get the keys?”

That might mean:

• Entering the market sooner with less than 20%
• Keeping some savings instead of putting everything down
• Combining different sources strategically

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Final Thought

Down payment is not just a percentage.
It’s a decision that shapes everything that comes after.

The right approach depends on:

• Your income
• Your comfort level
• Your long-term goals

Because buying a home should feel like progress
Not pressure

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If you’re thinking about buying and want to understand what structure makes the most sense for you, I’m always happy to walk through it with you.

Sometimes one small adjustment in how you structure your down payment can completely change your experience after you move in.

You can contact me today if you have any questions or concerns at:
416-879-2985
sara@sarasecuremortgages.com

Separation is one of those life moments where everything feels uncertain.
But your mortgage? That part is very certain.

And this is where I see people get caught off guard.

They assume that once they separate, the mortgage somehow “adjusts” to the new reality.
It doesn’t.

Let’s walk through this clearly, so you understand what’s actually happening and more importantly, what you can do about it.

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The Reality Most People Don’t Expect

If your name is on the mortgage, you are still fully responsible for it.

Not partially. Not emotionally. Legally.

Even if:

• You moved out
• Your ex is living in the home
• You have a separation agreement

From the lender’s perspective, nothing has changed.

This is one of the biggest misconceptions I see. People think the separation agreement solves everything. It doesn’t. It defines responsibilities between you and your ex, but the lender is not part of that agreement.

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What You Can Do

Let’s break this into real, practical options.

1. Sell the Home

This is the cleanest and often the simplest path.

You:

• Sell the property
• Pay off the mortgage
• Split any remaining equity

This works well when:

• Neither person can qualify on their own
• There is too much financial pressure
• Both parties want a clean break

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2. One Person Keeps the Home

This is very common, especially when children are involved.

But it comes with one key requirement:

The person keeping the home must qualify for the mortgage on their own.

That usually means:

• Refinancing the mortgage
• Proving income and credit
• Potentially buying out the other person’s share

In Ontario, if there is a formal separation agreement, there can be flexibility with how lenders structure the refinance, especially for equity buyouts. But it is still very much a qualification-driven process.

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3. Stay on the Mortgage Temporarily

Sometimes people decide to “wait it out.”

Maybe:

• The market isn’t ideal
• One person needs time to stabilize income
• There are family considerations

This can work, but it needs to be intentional.

Because here’s the part most people don’t think about:

While your name is still on that mortgage:

• It counts against your debt
• It impacts your ability to qualify for another property
• Your credit is still tied to those payments

So this is not a long-term strategy. It’s a short-term bridge that needs a clear exit plan.

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4. Use Equity Strategically

This is where a lot of opportunities get missed.

Depending on the situation, there may be ways to restructure instead of rushing a sale.

For example:

• Refinancing to pay off joint debts
• Using a second mortgage or HELOC to facilitate a buyout
• For homeowners 55+, using a Reverse Mortgage to access equity without adding monthly payment pressure

A Reverse Mortgage can allow someone to:

• Stay in the home
• Access a portion of their equity
• Avoid mandatory monthly payments, which helps protect cash flow during a stressful transition

And importantly, they still maintain ownership of the home

This is not the right fit for everyone, but in the right situation, it can create breathing room when it’s needed most.

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What You Can’t Do

This is just as important.

❌ You can’t just remove your name from the mortgage

It doesn’t work like that.

The lender has to approve:

• A refinance
• A transfer
• Or the mortgage has to be paid off

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❌ You can’t ignore the mortgage if you move out

Even if you are no longer living there, you are still responsible.

If payments are missed:

• Your credit is affected
• Your financial future is impacted

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❌ You can’t rely only on the separation agreement

It helps define responsibilities, but it does not replace lender approval.

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The Bigger Picture Most People Miss

This isn’t just about the house.

It’s about your next move.

If your name stays on a mortgage you don’t control:

• It can delay buying your next home
• It can reduce your borrowing power
• It can keep you financially tied to a situation you’re trying to move on from

And I’ve seen this happen more often than people expect.

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A Smarter Way to Approach This

Instead of asking:

“What should I do with the house?”

Ask:

“What do I want my financial position to look like in the next 1 to 2 years?”

Then build the mortgage strategy around that.

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Final Thoughts

Separation is already a difficult process. The mortgage should not quietly become the thing that creates long-term financial stress.

There are usually more options than people realize.
But the right option depends on:

• Income
• Equity
• Timing
• And long-term goals

If you are in this situation, or you’re starting to think about it, having the right conversation early can make a significant difference.

Not to rush decisions
But to make sure you don’t get stuck in the wrong one

Contact us today:
Tel: 416-879-2985
Email: sara@sarasecuremortgages.com

What is the Minimum Down Payment Required for a Home in Toronto?

Buying a home in Toronto can be a daunting task, especially with soaring property prices. One of the most critical aspects of planning your purchase is understanding the minimum down payment required. Whether you’re a first-time homebuyer or looking to upgrade, knowing how much you’ll need to put down is essential for budgeting and getting pre-approved for a mortgage. Here’s a detailed breakdown of what you need to know about down payments in Toronto.

1. What is a Down Payment?

A down payment is the initial amount of money you pay toward the purchase price of your home. The remainder is financed through your mortgage. The size of your down payment can significantly impact your mortgage terms, interest rate, and whether or not you need mortgage insurance.

2. Minimum Down Payment Requirements in Toronto

The required minimum down payment in Canada depends on the purchase price of the home:

– For homes priced up to $500,000: You’ll need to provide at least 5% of the purchase price as a down payment.

– For homes priced between $500,000 and $999,999: You’ll need 5% of the first $500,000, and 10% of the portion of the price above $500,000.

– For homes priced at $1 million or more: A down payment of 20% is required, regardless of the mortgage size.

Let’s break this down with an example:

If you’re buying a home priced at $750,000:
– 5% of the first $500,000 = $25,000
– 10% of the remaining $250,000 = $25,000
– Total minimum down payment = $50,000

As of Dec 15th the regulation will change and as a result the minimum down payment will change. For homes priced between $500,000 and $1.5 million: A minimum down payment of 5% is required on the first $500,000, and 10% on the portion above $500,000 up to $1.5 million. For homes priced at 1.5 million or up: A down payment of 20% is required.

It’s crucial to note that these figures are minimum requirements, and a larger down payment can significantly benefit you in securing better mortgage terms.

3. How Your Down Payment Affects Your Mortgage

The size of your down payment plays a critical role in your mortgage. If your down payment is less than 20% of the purchase price, you are required to purchase mortgage default insurance. This insurance protects the lender in case you default on your mortgage but adds an extra cost to your monthly payments.

Larger down payments not only reduce your overall mortgage amount but also help you avoid these extra insurance premiums.

4. Tips for Saving for a Down Payment

Saving for a down payment, especially in a high-priced market like Toronto, can seem overwhelming. Here are a few strategies to help you build your savings faster:

– Set a clear goal: Knowing exactly how much you need to save helps you stay motivated.

– Open a dedicated savings account: Consider opening a high-interest savings account specifically for your down payment.

– Explore government programs: First-time homebuyers may be eligible for programs like the Home Buyers’ Plan (HBP), which allows you to borrow from your RRSPs tax-free, which offers shared equity with the government. Also The Government of Canada introduced the First Home Savings Accounts (FHSAs) in 2023. This is a registered savings account in which first-time homebuyers in Canada can contribute up to $8,000 per year, up to a lifetime maximum contribution limit of $40,000 per taxpayer. Open a Tax-Free Savings Account (TFSA).

– Track your spending: Cutting back on non-essential expenses can significantly boost your savings over time.

5. Why Choose Dominion Lending Centres?

At Dominion Lending Centres, we specialize in helping clients navigate the complexities of Toronto’s real estate market. Whether you’re a first-time homebuyer or looking to move up, we’ll provide personalized mortgage advice, helping you understand your options and secure the best terms available.

Ready to take the next step toward homeownership? Contact us today for a personalized consultation.

Sara Taheri
Dominion Lending Centres Expert Financial, Lic#12129
📞 416-879-2985
📧 sara@sarasecuremortgages.com
🌐 sarasecuremortgages.com

How Much Can I Afford to Borrow for a Home in Toronto?

One of the most common questions we receive as a mortgage agent is, “How much can I afford to borrow?” The answer depends on various factors that lenders consider when assessing your borrowing capacity. Let’s walk through these essential factors to help you understand your financial limits and make informed decisions.

1. Income

Income is a crucial factor in determining how much you can borrow. Lenders look at your gross annual income before taxes and deductions, which includes salaries, wages, rental income, and other consistent sources of income. They assess your ability to manage both housing costs and debts using two key ratios: Gross Debt Service (GDS) and Total Debt Service (TDS).

2. GDS and TDS Ratios

– Gross Debt Service (GDS) Ratio: This ratio measures the percentage of your gross income that will go toward housing costs, including mortgage payments, property taxes, heating costs, and 50% of condominium fees (if applicable).

– Total Debt Service (TDS) Ratio: TDS accounts for all housing costs plus other monthly debt obligations, such as car loans, credit card payments, and personal loans.

These ratios give lenders a clear view of your ability to manage monthly payments without being overextended. Maintaining these ratios within acceptable limits improves your chances of securing a mortgage and ensures that your monthly mortgage payments remain manageable.

3. Credit Score

Your credit score is a reflection of your financial history and reliability. Lenders use your score to assess both your borrowing power and the interest rates you’ll qualify for. Generally, a higher score not only increases your chances of approval but can also result in more favorable terms, potentially lowering your total loan cost.

4. Down Payment

Your down payment directly affects the size of your mortgage. In Canada, the minimum down payment requirements vary based on the home’s purchase price, with higher down payments required for properties over certain amounts. A larger down payment reduces the amount you need to borrow, and it can sometimes give you access to better interest rates or terms.

5. Interest Rates

Interest rates significantly impact your affordability. Even a small change in rates can increase or decrease your monthly payments, affecting the total mortgage amount you qualify for. Fixed-rate mortgages provide consistent payments, while variable-rate mortgages can fluctuate. I can help you weigh these options based on your budget and risk tolerance.

Next Steps

At Dominion Lending Centres Expert Financial, we’re here to help you determine your borrowing capacity with precision. By exploring each of these factors, we can find a mortgage solution that best fits your unique financial situation. Reach out to learn more about how we can guide you toward the home of your dreams with the clarity and confidence you deserve.