Is Bigger Always Better?

Marci • June 1, 2012

No, bigger isn’t always better, but in the case of a down payment on a home, it is almost always better. You’ll free up more money month to month by putting a bigger chunk down at the start, but remember to set aside enough for “come what may”.

Let’s look at the difference between 5% down and 25% down on the purchase of a $500,000 home. We’ll assume there is no other debt, no strata fees, $2000 property taxes and a 3.29% rate.

At 5%, the down payment is $25,000 and the mortgage is $475,000. But wait! Because you need CMHC for default insurance, the mortgage goes up to $489,012.

This equates to monthly payments of $2,133 and required income of $90,000 a year to obtain the mortgage.

At 25%, the down payment is $100,000 and the mortgage is $400,000. No CMHC or other default insurance required.

In this case, monthly payments are $1,750 and income required to obtain the mortgage is $75,500.

But wait – These days lenders are offering better rates with less (yes, less) money down. So for this same mortgage with 5% down, you might actually qualify today for a rate of 3.19%. That equates to a monthly payment of $2,106. Which is a savings of just $25 per month and total interest savings of just $2,351 over the 5 years. (As an aside, some of you are probably shocked that .10% is such a small savings! Remember, it is not all about the rate – we’ll save that for another Blog post!)

Obviously, month to month, the larger down payment is going to be more comfortable. It frees up close to $400 a month. That being said, before you think about slapping every penny on the down payment, there are other considerations.

Life is uncertain. You can budget and plan to the nickel, but that doesn’t mean things will always go as planned.  When considering how much to put down, keep in mind that you need to cover closing costs: realtor fees if selling another house, legal fees, (about $1,000) property tax adjustments ($1,000 to $2,000) Property Transfer Taxes (1% of the first $200,000 and 2% of balance on all purchases over $425,000 – download an app to help you calculate this on iTunes (search DBM app) – plus any moving costs or fees for renovations you may need to do.

Holding back part of that money gives you the funds you need when buying an older home. If the appliances, water tank or furnace look old, you’ll need cash available. Take a look around at the house you’re buying and think about some of the extras you might buy like a riding lawnmower or a desk that fits the new office space.

After you’ve reviewed the expected, keep in mind there is always the possibility of the unexpected.

The washer could stop without warning, the cat could need surgery or you may discover carpenter ants. Things change. Relationships change and situations change. Make sure there is enough money available for the unexpected. After you’ve settled into a mortgage with a down payment that allows for an emergency fund, manageable monthly payments and a reasonable household budget, you can always apply the extra money towards the mortgage later. Most mortgages allow principal reductions of up to 20% a year as well as an increase in mortgage payments by 20% without penalty. Both methods cut the interest you pay dramatically.

Ultimately, no matter what you do – make sure you leave some breathing room and don’t tie your money up too tight.

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Divorce and Your Mortgage: What You Need to Know

By Marci Deane • May 13, 2026
Going Through a Separation? Here’s What You Need to Know About Your Mortgage Separation or divorce can be one of life’s most stressful transitions—and when real estate is involved, the financial side of things can get complicated fast. If you and your partner own a home together, figuring out what happens next with your mortgage is a critical step in moving forward. Here’s what you need to know: You’re Still Responsible for Mortgage Payments Even if your relationship changes, your obligation to your mortgage lender doesn’t. If your name is on the mortgage, you’re fully responsible for making sure payments continue. Missed payments can lead to penalties, damage your credit, or even put your home at risk of foreclosure. If you relied on your partner to handle payments during the relationship, now is the time to take a proactive role. Contact your lender directly to confirm everything is on track. Breaking or Changing Your Mortgage Comes With Costs Dividing your finances might mean refinancing, removing someone from the title, or selling the home. All of these options come with potential legal fees, appraisal costs, and mortgage penalties—especially if you’re mid-term with a fixed-rate mortgage. Before making any decisions, speak with your lender to get a clear picture of the potential costs. This info can be helpful when finalizing your separation agreement. Legal Status Affects Financing If you're applying for a new mortgage after a separation, lenders will want to see official documentation—like a signed separation agreement or divorce decree. These documents help the lender assess any ongoing financial obligations like child or spousal support, which may impact your ability to qualify. No paperwork yet? Expect delays and added scrutiny in the mortgage process until everything is finalized. Qualifying on One Income Can Be Tougher Many couples qualify for mortgages based on combined income. After a separation, your borrowing power may decrease if you're now applying solo. This can affect your ability to buy a new home or stay in the one you currently own. A mortgage professional can help you reassess your financial picture and identify options that make sense for your situation—whether that means buying on your own, co-signing with a family member, or exploring government programs. Buying Out Your Partner? You May Have Extra Flexibility In cases where one person wants to stay in the home, lenders may offer special flexibility. Unlike traditional refinancing, which typically caps borrowing at 80% of the home’s value, a “spousal buyout” may allow you to access up to 95%—making it easier to compensate your former partner and retain the home. This option is especially useful for families looking to minimize disruption for children or maintain community ties. You Don’t Have to Figure It Out Alone Separation is never simple—but with the right support, you can move forward with clarity and confidence. Whether you’re keeping the home, selling, or starting fresh, working with a mortgage professional can help you understand your options and create a strategy that aligns with your new goals. Let’s talk through your situation and explore the best path forward. I’m here to help.

Everything You Need to Know About Second Mortgages

By Marci Deane • May 6, 2026
What Is a Second Mortgage, Really? (It’s Not What Most People Think) If you’ve heard the term “second mortgage” and assumed it refers to the next mortgage you take out after your first one ends, you’re not alone. It’s a common misconception—but the reality is a bit different. A second mortgage isn’t about the order of mortgages over time. It’s actually about the number of loans secured against a single property —at the same time. So, What Exactly Is a Second Mortgage? When you first buy a home, your mortgage is registered on the property in first position . This simply means your lender has the primary legal claim to your property if you ever sell it or default. A second mortgage is another loan that’s added on top of your existing mortgage. It’s registered in second position , meaning the lender only gets paid out after the first mortgage is settled. If you sell your home, any proceeds go toward paying off the first mortgage first, then the second one, and any remaining equity is yours. It’s important to note: You still keep your original mortgage and keep making payments on it —the second mortgage is an entirely separate agreement layered on top. Why Would Anyone Take Out a Second Mortgage? There are a few good reasons homeowners choose this route: You want to tap into your home equity without refinancing your existing mortgage. Your current mortgage has great terms (like a low interest rate), and breaking it would trigger hefty penalties. You need access to funds quickly , and a second mortgage is faster and more flexible than refinancing. One common use? Debt consolidation . If you’re juggling high-interest credit card or personal loan debt, a second mortgage can help reduce your overall interest costs and improve monthly cash flow. Is a Second Mortgage Right for You? A second mortgage can be a smart solution in the right situation—but it’s not always the best move. It depends on your current mortgage terms, your equity, and your financial goals. If you’re curious about how a second mortgage could work for your situation—or if you’re considering your options to improve cash flow or access equity—let’s talk. I’d be happy to walk you through it and help you explore the right path forward. Reach out anytime—we’ll figure it out together.

Bank of Canada Holds Rate at 2.25% — April 29, 2026

By Marci Deane • April 29, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. This decision comes against a backdrop of significant global uncertainty — and for Canadian homeowners, buyers, and anyone with a mortgage coming up for renewal, here's what it means.