At least 208 families were able to purchase new homes last year with only a $2,000 down payment for each property, thanks to a Calgary venture that allows first-time buyers and financially struggling households to get real estate via cost-sharing.
Attainable Homes, a social enterprise by the City of Calgary, collaborates with industry professionals such as builders, developers, lenders, and lawyers to make the costs of purchasing houses more manageable for Calgary locals.
“Our partner lenders can provide advice to help people improve their credit rating. They can also help people plan ahead for attainable home ownership in the future,” Attainable Homes communications manager Marissa Toohey told the Calgary Herald
This arrangement can be especially helpful for young first-time buyers, who often have to save a disproportionate amount of their incomes to accumulate the funds for buying a home.
According to mortgage broker Richard Anderson, the continuous upward trend in real estate prices is leaving many millennials no choice but to co-fund their first home purchases with their parents.
“About 30 per cent of first-time home buyers get gifts from family members, either for a partial or all of the down payment,” Anderson stated.
“On insured mortgages, the down payment is five per cent of the first $500,000 and 10 per cent on the balance above that up to $1 million. So if you buy a $700,000 house, your down payment would actually be about 6.4 per cent,” he added.
Anderson said that another option that young would-be buyers can entertain is RRSPs, which they can engage in up to a maximum of $25,000 without any tax consequences.