Jon Chaudhari

Buying Advice - Financing

Why is Whistler such a great place to invest in real estate? Whistler is in the unique position of being a great investment because of:

• The bed unit cap - a limit on building in Whistler, which is expected to occur in the next few years.
  
• The excellent marketing job of Tourism Whistler - formerly the Whistler Resort Association.
  
• The fact that it has been consistently rated the number one resort in North America for the past seven years - see the Whistler Resort #1 Listings page.
  

Often visitors to Whistler have no intention of buying a home here before they leave for their holidays in North America's number one resort, but that often changes once they have arrived. Last year's record breaking snow falls only helped to increase the number of skier visits and summer visits rose sharply as well.

• First, housing costs including the mortgage payment, taxes, utilities and strata fees cannot exceed 32% of your gross income. If you have no other debt, an exception can be made up to 35%. Total debt servicing, including all other loans and credit payments cannot exceed 40% of your gross income.
  
• Secondly, in a conventional mortgage, a down payment of 25% is required. The exceptions to this are high ratio, insured mortgages that are available for your primary residence with a minimum of 5% down payment. The insurance cost increases as the percentage of financing requested increases.
  

Financing criteria - Higher Valued Properties
With higher valued properties, lending values decrease as the value of the property increases.

• In other words, for a property valued at or below $500,000, the conventional down payment of 25% is required.
  
• For the next $250,000, the down payment amount shoots up to 40%.
  
• For the next $250,000, 45%, and then 50% of the remainder.
  
• For example, with a purchase price of $800,000, the maximum mortgage allowed is $552,500. This applies to Canadian residents only, either owner occupied or investment properties.

Non-residents
For non-residents, the required down payments are slightly different.

• For the first $400,000, a down payment of 35% is required.
  
• For the next 300,000, a down payment of 45% is required,
  
• Then 50% for the remainder.
  

For example, if the purchase price is $800,000 the maximum mortgage allowed is $475,000.

It should be noted that lending policies at Canadian institutions vary from institution to institution, period to period, person to person and from property to property. If you are interested in the exact situation that addresses the property you are considering, please contact one of the mortgage brokers or lenders listed Whistler Real Estates Strategic Partners Page.