Servus Credit Union was the last lender to continue to offer '0 down' or 'zero down' payment mortgages via a program which they would give you cashback which the purchaser would then be able to use for downpayment funds. Effective today, this program has ended. They will still offer a cashback program, but these funds CANNOT BE USED FOR DOWNPAYMENT!
This means that there are no longer any options for a homebuyer in Canada other than having 5% downpayment from their own resources or from a documented gift from an immediate family member. This too could change very soon. The federal government and CMHC are discussing raising the minimum downpayment from 5% to a higher amount. Some have suggested 7 or 8 percent, while others believe that 10% downpayment should be the minimum.
NOTE: there will still be some creative lenders or mortgage brokers who try to find a loop hole, or take advantage of CMHC flex down program to find a way around this restriction, but these schemers will not last and their advice and tactics should be a red flag to consumers. If you deal with shady lenders and brokers, expect that in the end you will pay the price for it.
Regardless, the amount of downpayment money needed to purchase a home in Lethbridge, Alberta, or anywhere else in Canada is currently 5% for the timebeing. If you are on the fence about if the time is right to purchase, remember that this amount could go up at anytime in the immediate future.
Here is the email from Servus:
Please note Servus Credit Union has discontinued the program for cashback for down payment effective immediately.
Servus CU will continue to provide cashback options relative to closing cost, purchasing furniture, home renovations, etc. The proceeds are provided to the member after registration and closing the mortgage.
Servus CU will honor the pre-approvals that may have been obtained prior to today up until the expiry of the commitment.
Please do not hesitate to contact us if you require further information.
SCU Broker Services/Mtg. Development South Team
Robert May is a Realtor, as well as the broker and owner of Rainbow Realty of Lethbridge Alberta . He is also a licensed Lethbridge mortgage broker and financing expert with Canada First Mortgage of Calgary Alberta. He has been in the Lethbridge real estate industry since 1993 and offers full Lethbridge real estate services to Lethbridge and surrounding area, as well as Lethbridge mortgage financing, mortgage refinancing , preapprovals, and Lethbridge loans financing to Lethbridge and Southern Alberta. He can be found online at this link: mortgage broker Lethbridge
Let me share my 16+ years experience in the local Lethbridge real estate and financing market with you! It is the first step towards making a profitable real estate decision.