1st time homebuyer downpayment question

[Robert Becher]

Hey everyone, got a question I hope someone can answer for me.

Looking to buy my first house. Was wondering if I should save up for the 20% down to save on the mortgage insurance, or just go ahead and use what I have for a downpayment (over 5%). 

Pre-approved right now for $300,000ish. Focused right now on paying off what debt I have. Mortgage lender said I’d be approved for $600,000 once my debt was gone. All debt has been consolidated to low interest Line of Credit.

The company I work for will give me $24,000 for a down payment and help subsidize the interest payments for a few years. 

Was wondering how best to maximize this. I can only do this offer for my first house, and have to live there for few years. I heard I can get a cash back mortgage too, so maybe do that and have enough to get another property and make that a rental.

Any suggestions on what more experienced investors would do in this situation? 

Thanks in advance!

[Roy N.]

Originally posted by @Theresa Harris:

@Robert Becher  There are a number of opportunities for first time home buyers.  Depending on your income you might also qualify for help with your down payment from the federal government and you can borrow against your RRSPs (but you have to pay them back within a set time to avoid tax implications).  

Find out how much your CMHC insurance would be.  Last time I looked it was cheaper to pay 20% down and avoid it.  They have a calculator you can use.  If you did 5% down ($15K) for a $300k mortgage, you'd pay $11.4K for the CMHC insurance vs $8.4K for 10% down plus interest (which varies depending on how much you put down).

To build on Theresa's foundation:  There was a time where the "better" interest rate through an insured mortgage justified the insurance premium ... in our low-interest rate, stagnant environment of the past decade, that's no longer true.   Even when the premium was justified, you were better off to pay it out-of-pocket than have it added to the principal of your financing (and pay interest on it).