Back in the olden days... I seem to remember that you needed to have a certain % downpayment to buy a house... Nowadays, you can buy a house with a tiny 5% downpayment. Mind you, you'll also need to pay insurance with the Canada Mortgage and Housing Corporation... If you have at least a 20% downpayment, no insurance required... Which makes sense to me...
There was an article in the news a few weeks ago. This couple had bought a house about 3 years ago (I'm guessing)... valued at $300,000. They now have to renew their mortage for $288,000... but their house is only worth $240,000 in today's market. The bought at the peak and now... 3 years later they are stuck... They need to come up with $48,000 or they could lose their house... And I'm thinking... in the next year or two, there are going to be a lot more of those house mortgages coming up for renewal... houses that were bought at the peak of the market and houses that are now worth a lot less. Which is not a big deal if you bought it with a large downpayment (20%) and can weather the ups and downs of the market. But if you used a small downpayment, and your house's value has sunk more than 5% or 10%... well... there are going to be a lot of stressed people...
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