Buy a house in Toronto without putting down any cash, and you’ll get to own the real estate for only 2.5 per cent.
That’s what allows Globe and Mail columnist Robyn Doolittle to write that “Buying a house in Canada these days has gotten so cheap, at 2.5 per cent down, you can get a $50,000 house in Toronto that may have been there for the asking price a few months ago.”
Doolittle describes an offer made to a Toronto bank for a property last year, but published this week by the Globe’s Property Guide.
Q: I have an opportunity for first-time homebuyers and first-time homeowner to own a home for just 2.5 per cent down. What do you think of this?
It’s a great deal if you are looking for a down payment, which would be a little more than 7 per cent for a three-bedroom home, for example. If you have no money for a down payment, this may be a great option. It also offers a real option for some couples who are in the process of getting divorced and would like to maintain ownership of a home. They could just keep one half of the mortgage interest — which could be a little larger than 2.5 per cent — and divide up the mortgage payment.
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The advantages are better than you may think. For example, the process typically takes less than a year, and you will save thousands of dollars in interest over the life of the mortgage. There are no closing costs on this product, so the loan amounts are reduced even further. And one of the advantages that’s a bit harder to calculate is that the payback period is shorter, so you will be able to save thousands more in interest over the life of the loan.
You can find out more about what’s involved here, or complete the acceptance process here.