John is buying a pre-construction condo in Toronto for $950,000. He wants to put down the minimum required amount. Which of the following statements applies to his down payment and mortgage insurance eligibility?

Question: John is buying a pre-construction condo in Toronto for $950,000. He wants to put down the minimum required amount. Which of the following statements applies to his down payment and mortgage insurance eligibility?

Answer options:

• He needs a down payment of $95,000 and is eligible for insured financing. ✅ He needs a down payment of $70,000 and is eligible for insured financing.
• He needs a down payment of $95,000 and the mortgage would be uninsured.
• He needs a down payment of $70,000 and the mortgage would be uninsured.

Correct answer: He needs a down payment of $70,000 and is eligible for insured financing.

Explanation: The minimum down payment for a $950,000 property is 5% on the first $500,000 ($25,000) and 10% on the remaining $450,000 ($45,000), totalling $70,000. Since this is less than 20% down, the mortgage is high-ratio and must be insured.