Bought a house , seeking advise on how much down payment to put and how much to take mortgage

$150,000 down, keep $50,000 for backup. Put more $ in at and of year to cut down length to pay mortgage

Take as much mortgage at these low rates that you can afford and pay comfortably. Your money is better suited elsewhere than paying down debt at 1.5%.

Lowest rates are available at 5% down. I’d just do that— prepayment 20/20 privileges. Max that out and it will save you a bunch of interest, whilst using other funds available into stocks maxing out tfsa and RSP contributions. Pulling tfsa gains later on and rolling into new house. Rince repeat but find a good accountant

will5619 wrote: ↑ Lowest rates are available at 5% down. I’d just do that— prepayment 20/20 privileges. Max that out and it will save you a bunch of interest, whilst using other funds available into stocks maxing out tfsa and RSP contributions. Pulling tfsa gains later on and rolling into new house. Rince repeat but find a good accountant

Doesn't the CMHC mortgage insurance make this cost-prohibitive?

No because the money freed up can make 8-15% return YoY on stocks alone. Having readily available liquid cash allows you to purchase another unit. Prepayment privileges give you the flexibility to pay it off quicker, whilst having the benefit of lowest rates available plus it’s insured so less risk overall to banks when it comes time to get another property.

Insurance discount even if .025 comparing let’s say 2% to 1.75 would save approx 11,000 in interest over 25 years on a 500,000 house. Essentially you are breaking even with those savings, and, freeing up your cash. Liquid capital is better on hand than inside your mortgage. Especially with the current low interest rates. So putting minimum down now and investing is better, and utilizing other forms of investment/ business ventures with your capital is best.Like I said tfsa rrsp and aim for above 8% YoY likely hitting 15%. If you must put more down that’s what prepayment privileges are for. May as well make some money while interest rates are low and guarantee your lowest rate with paying CMHC. IMO.

max out mortgage. it is so dumb not to borrow to max with negative real interest rate.
invest the money for higher yield.

Take as much as you can without requiring CMHC. Invest 50-75% of balance and pocket the rest for a rainy day and/or when you require liquidity to purchase second property.

Thanks everyone.
I am still not sure whether my question is answered yet but appreciate your points of view a lot
Rephrasing my question - I have bought Property1. I am hoping to buy Property 2 in lets say in one to two years. I am trying to assess what will be better position at that time when banks will assess my situation for lending? Which situation will be more favorable for banks to lend me on property 1

( I have 200K now with me) and bought property 1 for 450K)
and lets say I will buy another 450K property in 2 years from now

When buying property 2
Situation 1 - Outstanding mortgage at that time (450K price of property 1 - 90K down right now- lets say I pay 40K in 2 years) = 320K ; asking mortgage on property 2 = 450K property 2 - 110K (saved by just paying 90K and not 200K as down payment on property1 right now) = 340K

Situation 1 - Outstanding mortgage at that time (450K price of property 1 - 200K down right now- lets say I pay 40K in 2 years) = 210K ; asking mortgage on property 2 = 450K property 2 - $ 22500 down ( New saving in next 2 years , this is 5% ) = 427500 K

Or it does not matter because sum of outstanding mortgage + mortgage asked by the banks at that time will be almost same in both situations

Thats a huge detail you left out there

If this was me I'd put down 100k now and keep the remaining and invest until Im ready for property #2. It also allows for $ accessibility

At the very least it's invested, but you know how life changes correct? You may not even be able to get property #2 in the future

Biscayne05 wrote: ↑ Thats a huge detail you left out there

If this was me I'd put down 100k now and keep the remaining and invest until Im ready for property #2. It also allows for $ accessibility

At the very least it's invested, but you know how life changes correct? You may not even be able to get property #2 in the future

Thanks a lot
I am now intending towards paying 90K down for property #1 that will be around 20% of total mortgage and put the remaining 110K to investment( I am very bad at that)
When you said that "You may not even be able to get property #2 in the future", did you mean because of price appreciation or my personal situations ?
Because my personal situation , I am hell determined to buy Property#2 and the 110K that I have will only increase and not decrease as I will save more funds. Buying Property#2 is not an IF but WHEN for me. It is a need. It is just that I have already bought#1 now, I will have to treat #2 as Investment property.
If you meant, I wont be able to buy #2 because of price appreciation, I better save fast and hurry up .. right :-)

I'll go a bit against the grain and suggest that you put in enough to make the mortgage payments affordable even if you lose a job or have some other unforeseen negative financial event.

Keep in mind that interest rates are likely to move up in the next 12 months and current returns on stocks are probably averaging in the 4-6% range. You could choose riskier assets, but that's a bet that can go either way.

Put 20% down and invest remaining into high yield dividend ETFs for 7-8% return.