Warning: people keep thinking a 5% down payment is the same as it was ten years ago

I keep hearing folks say they're saving for a 5% down payment like that's the only hurdle, but the stress test and mortgage insurance on that small amount changes everything. A friend in Hamilton just got approved but his monthly payment on a $500k place is nearly double what his parents paid on a similar mortgage in 2010. How do you even plan for that when prices keep moving? Anyone else run the real numbers lately and get a shock?

2 comments

2 Comments

kelly.robin1d ago

Tell me about it... we ran the numbers last month and just sat there staring at the spreadsheet. The insurance premium on a low down payment feels like a second mortgage now. My parents keep giving advice from when rates were under 3% and it just doesn't connect anymore. Planning feels impossible when you save for a goal that keeps getting more expensive. It's a totally different game now and it's exhausting.

victor_carter511d ago

My cousin in Phoenix finally bought last year and her PMI is over $400 a month, which is insane. @kelly.robin, you're right that the old advice just doesn't work anymore. I've been wondering if we're all focusing too much on single family homes because that's the old dream. Maybe the real move now is finding a cheaper duplex or townhouse to actually get in the game, even if it's not the perfect forever home. It feels like we have to play a completely different strategy than our parents did. The goalposts aren't just moving, the whole field changed.