Calgary has become an attractive choice for first-time home buyers and investors for affordable housing and lower property taxes. While most homes for sale in Ontario are decades old and sometimes need a lot of renovations, pre-construction homes in Calgary offer the exact opposite. You’ll be able to find a brand new 3-bed, 3-bath single-family home between $550,000 to $800,000 in some of the well-developed neighbourhoods in Calgary.
In Calgary, the amount you need for a down payment largely depends on the price of the home and the type of property you’re purchasing. But most projects require a 10% deposit compared to 15-20% in Ontario. We hope this blog helps you get a better understanding on how down payment for Calgary pre-construction works!
How is down payment for pre-construction units calculated in Calgary?
Pre-construction properties often come with a different set of down payment requirements compared to resale homes. When buying a pre-construction house in Calgary, developers usually ask for a larger down payment, often 20% of the purchase price. They have more relaxed rules for pre-construction condos and deposit requirements can range from 5 to 20%.
Either way, down payment is broken down into staged payments over the course of the construction period. Typically, you’ll pay a big chunk when signing the purchase agreement, then smaller payments, and then another big payment at closing.
Here’s an example of what you can expect to pay:
$3,000 upon signing the purchase agreement
5% within 30 days
5% within 90 days
5% within 180 days
5% upon occupancy
Would I still need mortgage insurance when buying Calgary pre-construction?
Yes, if your deposit was less than 20% of the purchase price, you are legally required to get mortgage insurance. It protects the lender in case you default on the loan and is calculated as a percentage of the loan amount. The less you put down, the higher the insurance premium.
For example, if you make a 5% down payment on a $500,000 home, you might pay an insurance premium of around 4% of the mortgage amount. Don’t worry, you don’t have to make a lump sum. It is added to your monthly mortgage payments.
However, if you manage to save up for a 20% down payment, you can avoid mortgage insurance altogether and save thousands of dollars over the years. If you can’t pay 20% in deposits right away, build that amount of equity as soon as possible and then, you can cancel the insurance.
Which are the best neighbourhoods in Calgary?
1. Arbour Lake
Located in Northwest Calgary, Arbour Lake is affordable and has a close-knit community. Average home price is around $600,000 and has a few up and coming pre-construction projects. You’ll mostly find a mix of townhouses and single-family homes in this neighbourhood.
2. Beltline
Probably the most happening neighbourhood in Calgary, Beltline is located just south of downtown. We recommend this neighbourhood for someone who’s active and appreciates the outdoors but also enjoys the convenience of living close to the city. You can expect to spend around $380,000 on a 2-bed, 2-bath condo in its pre-construction stage.
3. Aspen Woods
Tucked away in Calgary’s southwest region, Aspen Woods is known for its beautiful estate homes and even more beautiful views of the Rocky Mountains. It’s home to some of the province’s best private schools including the Webber Academy. Being one of Calgary’s most prestigious areas, real estate here is equally expensive with homes starting around $1 million.
4. Bridgeland/Riverside
Bridgeland or Riverside is an up and coming neighbourhood in northeast Calgary has a lovely mix of charming character homes and new condo and townhouse developments. It has some gorgeous parks and cafes and also hosts fun events during summer. Real estate prices are slightly on the higher side starting at $700,000. We have a few projects in this neighbourhood with closing within the next two years. Send us a message for more details!
5. Mahogany
A new favourite among families and first-time homebuyers, this neighbourhood in southeast Calgary has an average home price of around $550,000. Buyers have all kinds of property types to choose from. It’s definitely more suburban than other neighbourhoods we’ve mentioned and is perfect for raising a family.
How to find a reliable pre-construction project in Calgary?
If you’re from Ontario like many of our clientele, this is the only question that might keep you from investing in Calgary’s growing real estate. Beyond working with a real estate agent that you trust, here are some tips to keep in mind:
1. Warranty claims
While all builders offer the same quality, the real difference is in how they handle customer service and warranty requests. Many people on subreddit confirmed Homes by Avi is way better than some of the other known builders.
2. Walk-throughs
Attend walk-throughs that are routinely offered by the builders. There are typically three of them: rough in walk of electrical/plumbing, cabinet walk through, and final walk through. While this is only available for their buyers, find a friend or family member who purchased with them and will bring you as your plus one.
3 . Check for restrictions
Different neighbourhoods have different restrictions, which can be a problem a few years down the line, especially for building a garage or landscaping. Check city bylaws for the correct information and talk to a real estate lawyer to confirm your doubts.
Has a Calgary project caught your eye? Our sales team can provide details on some great options. Just send us a message!