Another way to purchase your new home without a down payment is with a Cash Back Mortgage where the lender will approve you for up to 97% LTV financing and give you cash back percentage of the loan amount which you can then use for down payment.

You would use this product only when you lack the down payment and have a credit score below 680.

Eligible Down Payment Sources

• Lender cash back incentives (up to 7%)

• Equity borrowed from any source that is arm's length to the purchase or sale transaction, including personal loans, lines of credit or credit cards. Loan repayments must be included in the TDS calculation.

• Gifts or grants from any party that is arm's length to the property purchase transaction

• Rent to own payments that exceed a reasonable current market rent

• Down payments may not be paid out of, or included in, the insured mortgage, including any recovery of lender cash back incentives

Ineligible equity sources

Some equity sources are not eligible. These include sources that are not arm's length or that are tied to the purchase or sale of the property, either directly or indirectly.

For example:

• Builder incentives or loans

• Realtor/ mortgage broker incentives or loans to the borrower that impact the property selling price

• Loans/ gifts from the seller of the property (the vendor)

• Third parties that receive payment from the vendor or the builder

Premium rates*

*A .20% premium surcharge will be applied to the above premium rates for every 5 years of amortization beyond the traditional 25 - year mortgage amortization period.

Borrower qualification

• If the down payment is borrowed, repayments must be included in the TDS calculation

• A minimum credit bureau score of 650 is recommended at 90.01-95% LTV and 680+ for 95.01-97% LTV.

• Non-residing guarantors are not permitted. Non-residing co-borrowers are acceptable (must be an immediate family member and on title).

• Lender to ensure that borrower demonstrates the ability to cover closing costs of at least 1.5% of the purchase price. These funds may be borrowed provided any associated repayments are included in the TDS calculation based on a 12-month repayment period