A first-time homebuyer, Sarah, wants to purchase a condo in Vancouver for $650,000. She has saved $80,000 for a down payment. What is the minimum down payment required, and is she eligible for high-ratio mortgage insurance?

Question: A first-time homebuyer, Sarah, wants to purchase a condo in Vancouver for $650,000. She has saved $80,000 for a down payment. What is the minimum down payment required, and is she eligible for high-ratio mortgage insurance?

Answer options:

• Minimum down payment is $40,000; she is eligible for high-ratio insurance. ✅ Minimum down payment is $65,000; she is eligible for high-ratio insurance.
• Minimum down payment is $40,000; she is not eligible for high-ratio insurance.
• Minimum down payment is $65,000; she is not eligible for high-ratio insurance.

Correct answer: Minimum down payment is $65,000; she is eligible for high-ratio insurance.

Explanation: The minimum down payment is 5% on the first $500,000 ($25,000) and 10% on the portion above $500,000 up to $1,000,000 ($150,000 * 10% = $15,000), totalling $40,000. Her proposed down payment of $80,000 is 12.31%, which is less than 20%, making her eligible for high-ratio insurance under CMHC/Sagen/Canada Guaranty guidelines.