SKYIRE HomeIndex Mortgage vs. other alternatives

If a CMHC insured mortgage does not appeal to you, there are other options, but many come with drawbacks.

Alternative options to CMHC

Option What this means
Postpone your purchase: Wait and save the 20% down payment It may take a long time to save enough for a 20% down payment. During this time, home prices may increase, requiring you to save even more for a down payment. You are also losing out on any home appreciation. Additionally, instead of building equity in a home, you might have to continue to rent.
Stop paying other debts (i.e. credit cards) to increase your down payment amount Bad idea. Stopping credit card payments or loan payments can lead to two negative outcomes:

1) Interest rates on credit cards are extremely high and could become a vicious cycle of more debt on top of debt.

2) Your credit score will suffer – making it more expensive to borrow money and to qualify for a mortgage in the future.

Borrow additional funds for a larger down payment Taking on more debt at a higher interest rate is not always a good strategy. Paying a mortgage and additional unsecured higher interest debt can be burdensome. Owning a home that you can’t afford to furnish is not a great outcome.
Obtain a private mortgage Some private mortgage funders may consider a high-ratio mortgage (LTV greater than 80%) but the interest rate on these mortgages is higher to offset the risk taken by the lender.
Random Luck You could try your hand at playing the lottery. Millions of Canadians do so every week. But keep in mind that the odds of winner are anywhere from 1 in 13.9 million to 1 in 28.6 million (depending on the lottery). In other words, not very good.
Inheritance While this is usually the result of an unfortunate event, some two-thirds of Canadians anticipate they will get one. However, it does take time for the estate to settle and funds dispersed. Along with an inheritance, there could also be conflicts with family members, probate fees and payment of taxes.
HomePlan An innovative savings program designed for would-be homeowners that are not at the point of purchase due to financial constraints, poor credit, or uncertain timing. Contact us for more information on HomePlan to find out how it can work for you.
HomeIndex Mortgage The best option. Buy your home today and keep more money in your pocket.


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