Cisco’s Fast Future Innovation Awards is Accelerating Canadian Innovation, Returning for 2022 + MORE Sep 13th
Find out your current tax-free savings account (TFSA) contribution limit by using this calculator. Note that in the second box below, you should not “double count” contributions that you have withdrawn and then legitimately re-contributed in the following calendar year or beyond, as this could lead to a false over-contribution warning.
TFSA is a bit of a misnomer. While you can use it for straightforward savings, think of it more accurately as an investment holding account to store things like exchange-traded funds (ETFs), guaranteed investment certificates (GICs), bonds, stocks and, yes, plain-old cash. While you do have to abide by the set amount of contribution room each year, any gains you earn on those investments will not affect your contribution room for the current year or years to come. Plus, the income earned is tax-free (more on that below). Any resident of Canada, over the age of 18, with a valid social insurance number can open a TFSA…
So, how much of a down payment do you need for a second home? That depends on a few factors, including whether or not you intend to live at the property.
Down payment requirements in Canada
Every Canadian home buyer is required to have a minimum down payment when purchasing property. A down payment is the money provided up front towards the purchase of the home, and it is directly tied to the value of the property.
When buying a home, the down payment rules in Canada are as follows:
Purchase priceMinimum down payment required$500,000 or less5% of the purchase price$500,000 to $999,9995% of the first $500,000 of the purchase price +10% of the portion of the purchase price above $500,000$1 million or more20% of the purchase price
If you’re buying a home priced under $1 million and your down payment is less than 20%, you’ll need to purchase mortgage default insurance, also known as mortgage loan insurance—which protects the lender if you can’t make your mortgage payments…