Buying a second property with less than 20% is it smart

4 Replies

I have a property that I am renting out and living with my boyfriend. I have saved up enough for another property not quite 20% down in Ontario, and I could have him go half in with me to get the 20% but I kind of just want to do it on my own. Is it worth paying the CMHC insurance in Ontario on the property to do it myself? Or should I wait and save more to have the complete 20% down? My other property I have a cash flow of 1200 a month coming from it so living mortgage free essentially on that one and this next one I could have a cash flow of roughly 600.. Wondering if anyone has some advice on what is smart to do save or pay the insurance and get in on this next deal? 

Hey Taylor, if the numbers work and meet your criteria then I think you should go for it! The only potential issue I see can be with the boyfriend. I would only get tied up in a contract with someone that I know on a emotional level if it is definitely a long-term/forever relationship.

Hi Taylor.  I feel that you should pay the CMHC insurance and get the place now on your own.  If you wait to save then the price may go up and make it worse for your purchase in the future.  And the CMHC insurance makes it so that the lender can give you an even better rate than if you put 20% down.  And this way you can also do it on your own since you are not 100% sure about the boyfriend.   Good Luck!

Hi @Taylor Summers It's not clear whether you would be moving into the new property. If it's not going to be your personal residence, you can't use CMHC. If you are moving in, I would definitely use CMHC, and put <20% down. I wouldn't over leverage myself with as little as 5% down though, in case prices in Ontario come down.