If you observe the trend for the past decade in the real estate market, you will find many new condo developments in Toronto. This is because a large population is choosing to buy luxury apartments either as an investment or to settle down in a great neighbourhood. If you are planning to purchase a unit, it helps to know that there are a variety of essential things to consider before making a final decision. Although factors such as the locality of the condo, its interiors, local transportation, and available amenities play a crucial role, the down payment is a vital aspect. Read on to learn more about making the down payment for your luxury condo.
Minimum Down Payment Required for the Purchase
A down payment refers to the amount that you need to pay when buying a property. This amount gets deducted from the total purchase price, and you can pay the remaining amount depending on your financial comfort zone. The minimum down payment usually depends on the total purchase price of the condominium unit.
Here’s an estimate of the minimum down payment for a condo:
- When the price is $500,000 or Less
5% of the purchase amount of the condo constitutes the down payment
- When the total price is between $500,000 and $999,999
5% of the initial $500,000 of the total purchase price, plus 10% of the remaining amount above $500,000 forms the total down payment
- When the condo price is $1 million or more
20% of the unit’s purchase amount will be your down payment
When Should You Make the Condo Purchase?
- Save for a Little Longer Before Making the Purchase
This way, you can pay a lesser interest rate for your mortgage because you will be borrowing a lower amount. In addition to this, you may not have to buy mortgage insurance. However, it helps to keep in mind that the savings required would be higher, which is why you must plan accordingly.
- Borrow a Higher Amount to Make the Condo Purchase
In this case, you should consider a higher interest rate because the borrowing amount is more. Also, you may need mortgage insurance, which will increase your overall cost of buying a condo. The advantage here is that you will get the condo for the current market price and can avoid the risk of price elevation in the future.
Tips to Help You Save for Your Down Payment
- Be sure to set up monthly savings goals.
- Clear your credit card debts, so that you can save more for your luxury condo.
- A simple way to add more to your savings for the down payment is to save your additional income, including tax refunds, work bonuses, and more.
The Davies Offers Excellent Luxury Condos in Toronto
If you are looking to purchase a luxury apartment in Toronto, be sure to check out our units for sale. The Davies condos are known for the incredible location and neighbourhood, excellent amenities, and luxurious lifestyle.