Capital used to purchase residential property can be divided into the following categories:

Your financial contribution, or down-payment, is calculated according to the property's market value, which represents the price the property would fetch on the open market as estimated by the bank. To keep your mortgage payments manageable, you should put up a minimum of 20% of this market value in cash, as equity of your own.

The remainder of the purchase/construction cost of your home can be financed with a mortgage. A mortgage is divided into two parts: a first mortgage worth up to 65% of the property's market value, which need not be paid back currently; and a second mortgage of up to 80% of the market value.

The affordability equation indicates what you can manage. A rule of thumb for the affordability ownership is: the amount you pay in mortgage interest, amortization and ancillary costs, added together, should not exceed one third of your gross income.

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