Flex Down Payment - Another Downpayment Option for Vancouver (and Canadian) Homebuyers

The Canada Mortgage and Housing Corportation, or CMHC, is now offering another down payment option to Canadian home buyers. This product, called Flex Down, offers buyers a "wider range of sources for their down payment such as borrowed funds and lender cash-back incentives."

They advertise this product as having the following features (these are quoted from CMHC):

• Available for Purchase Transactions
• Loan-to-Value ratios of 90.01% to 95%
• 1 – 2 unit residential properties
• Wider range of sources of down payment permitted
• Flexible financing options – single advance, progress advance and extended amortization periods are available
• Flexibilities available for the purchase of energy-efficient homes

and benefits (so are these):

• Helps Provide Earlier Access to Homeownership – with as little as 5% down using flexible sources of down payment.
  
• Flexible Down Payments – Wider range of sources of down payment permitted.
• Competitive Interest Rates – Access to CMHC insured financing, and as a result, competitive interest rates.
• Availability – Available coast-to-coast-to-coast with no set maximum loan amount.

This all sounds good but I at least with the cash back mortgages buyers to need to be careful about the rate as it can be significantly higher than it would with other mortgage products.