Buying a house over 1 million?

[nzwasp]

I heard this on the weekend and I didn't know if true so i'll ask the experts here:

If you buy a house in Canada under 1 million you can put any amount down but putting down 20% avoids CMHC fees.

If you buy a house over 1 million you put 20% down for the portion of 0 to 1,000,000 and then anything over the 1 million dollar mark you have to put down 50%???

Ie.

Buy a house for $1,500,000 you have to put down 450k? This seems unobtainable for most people even the more well off ones.

[FraserB]

Wouldn't this be a policy of individual lenders? I thought you couldn't get CMHC for anything over a million?

[nzwasp]

You cant. Im not asking about cmhc. I just thought it was wierd about the 50% down for amounts over 1 million.

[Sugarphreak]

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[mazdavirgin]

Mortgages over a million dollars do not qualify for CHMC insurance so it's between the bank and yourself to sort out how much down they would like before they are willing to give you a mortgage. So it would be more like the bank wants 50% down on the whole thing not the first million dollars. So potentially 750k down on a place worth 1.5 million.

[nzwasp]

Must be the bank this person was with. I cant imagine every bank requiring that. I would think the house and land would be security enough with 20 or 25% down

[ExtraSlow]

Most banks would be happy to lend you the $800k for your $1million mortgage.
Just checked realtor.ca and there are 774 homes listed in the Calgary area over $1million.
Heck, just in my nighborhood there are six, and I'm not anywhere that I'd consider "Ritchie Rich".

[M.alex]

Originally posted by nzwasp

Buy a house for $1,500,000 you have to put down 450k? This seems unobtainable for most people even the more well off ones.

then they can't afford a 1.5M house?? SHOCKING

[oz388]

I'm wondering if in 10 years, 1M will be the average price of single houses?!

[Yuubah]

It's called sliding scale, and it depends on where you buy the house, and the lender on the percentages.

For ex.. if you buy a house worth 1.5 million. some banks will give you 80% of the first million, and 50% of the remaining amount. So maximum total lending will be $800,000 + $250,000 = $1,050,000 mortgage.

And it is definately attainable especially if you bought pre-boom.

[Xtrema]

Originally posted by nzwasp
Buy a house for $1,500,000 you have to put down 450k? This seems unobtainable for most people even the more well off ones.

uh....IMO, I don't think anyone should have a $1M mortgage for a single primary home. If you need to borrow that much, you should downsize to something you can actually afford.

It's also a very bad investment. I'm not surprised bank asked for 50% down over $1M. It's hard to move properties over $1M unless it has excellent location. And that's a price range that is 1st to drop and last to raise when an adjustment comes.

I'm looking at a property at the end of the street and they asked for $1M which had no taker for 8 months and 3 real estate agents later. It has just been adjusted to $890K. The problem is that old mansions has elements that is deemed ugly 20 years later (In Hamptons, it's the oak color from the 90s). This property needs at least $150K of renos to bring it to today's standard.

So luxury mansions will rely on the lot to keep most of it's value. The house on top of it won't increase in value when you consider the maintenance/reno needed over time to keep it current.

[tpurcell4]

Originally posted by Yuubah
It's called sliding scale, and it depends on where you buy the house, and the lender on the percentages.

For ex.. if you buy a house worth 1.5 million. some banks will give you 80% of the first million, and 50% of the remaining amount. So maximum total lending will be $800,000 + $250,000 = $1,050,000 mortgage.

And it is definately attainable especially if you bought pre-boom.

In addition to this, it is a lender by lender policy. Most have a sliding scale, but where the lender starts the scale varies. Most start at 20% on the first million and 50% on the rest, while there are still a couple lenders who will go up to 20% on the first two million and 50% on the rest.

In our experience this has not been an issue for most buyers in the market for million plus homes. Most are only looking for mortgages between 50 - 65% LTV, and have a plan to pay this amount off within 5 years anyway. To quote one client, "When the money is essentially free I'll take it even if I do not need it right now".

This does however squeeze anyone out of the market that truly cannot afford to and should not purchase a home over one million.

Cheers,

Todd

[nzwasp]

I wasnt asking for myself. Im happy with my 600k house in the burbs.

A friend of mine is looking to buy around the million dollar range for something in the inner city ie in scarboro.

It seems though despite the fact theres houses over or close to a million dollars in scarboro they all look like they would require 200k worth of renovations to be up to todays standard.

[G-ZUS]

Pfffft I didn't even need a mortgage for my million dollar Mansion

[Sugarphreak]

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[G-ZUS]

Originally posted by Sugarphreak


Did you get the T-shirt?


» Click image for larger version

Yep but on a extra deep v-neck t-shirt

[you&me]

Some of you guys are talking like a million dollar mortgage is some obscene luxury.

"If you need that, you can't afford the house"??? Pfft, give your head a shake.

A million dollars hardly buys you a "mansion". If we're talking about million dollar homes in the fucking Hamptons (no offence ), then the whole significance of a "million dollar home" is lost. Hell, most attached infills you see being built in Marda Loop, Altadore, Hillhurst, Parkdale are all well over a million dollars, let alone the stand alone homes in those areas and all of those being built in Mt Royal, Elbow Park, Briar Hill, Aspen, etc...

The average house hold income in Calgary nearly hits the TDSR for a million dollar mortgage. Now, I'm not saying million dollar mortgages should be handed out to marginal qualifiers like that, but there is absolutely no shortage of families (dual-income or single) that can comfortably service a mortgage of that size in Calgary and that's pretty clear by all the construction activity at that level.

As Todd said, the money's too cheap to say no to...

[Sugarphreak]

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[SkiBum5.0]

Originally posted by you&me
Some of you guys are talking like a million dollar mortgage is some obscene luxury.

"If you need that, you can't afford the house"??? Pfft, give your head a shake.

A million dollars hardly buys you a "mansion". If we're talking about million dollar homes in the fucking Hamptons (no offence ), then the whole significance of a "million dollar home" is lost. Hell, most attached infills you see being built in Marda Loop, Altadore, Hillhurst, Parkdale are all well over a million dollars, let alone the stand alone homes in those areas and all of those being built in Mt Royal, Elbow Park, Briar Hill, Aspen, etc...

The average house hold income in Calgary nearly hits the TDSR for a million dollar mortgage. Now, I'm not saying million dollar mortgages should be handed out to marginal qualifiers like that, but there is absolutely no shortage of families (dual-income or single) that can comfortably service a mortgage of that size in Calgary and that's pretty clear by all the construction activity at that level.

As Todd said, the money's too cheap to say no to...

Glad someone said it - if you choose to live inner-city, and want/need more than 3 bedrooms you are looking at $1M.
And if you are able to put 20% down, there is no reason to put down more than that. There is no benefit unless you get a better rate.
It comes down to cash flow - if you can service the debt comfortably (important), then I don't see an issue.

Housing has appreciated by 10% inner city in ~12-18 months in some parts - 10% of $1M is larger than 10% of $600,000

[G-ZUS]

Originally posted by Sugarphreak
^^ Yep, million bucks doesn't get you much

Gets the city like 6000$yr/500$ a month in taxes though, that is criminal



I went for the double popped collar one in neon orange myself, haha

Should have went for hot pink, do more b!tches holla with a double popped coller?