Questions?

A mortgage broker works on your behalf to find a mortgage that fits your goals. Instead of offering products from a single bank, a broker has access to many lenders, including major banks, credit unions, monoline lenders and alternative lenders. Your broker reviews your income, credit and down payment, compares options, handles the application and paperwork, and negotiates with lenders for you, all through one point of contact.

A broker compares mortgages from many lenders at once, so you see more options than a single bank can offer, often with better rates or terms. Your application can be presented to multiple lenders without you having to apply at each one. Brokers also know which lenders suit situations like self-employment, past credit challenges or being new to Canada, and they stay with you through renewal and future financing. For most residential mortgages, the service comes at no cost to you.

For most residential mortgages, there is no cost to you. Brokers are typically paid a finder's fee by the lender once your mortgage closes. Fees may apply in some situations, such as private or alternative lending or complex files, and any fee must be disclosed to you in writing before you commit.

Lenders look at two ratios. Gross Debt Service (GDS) is the share of your gross monthly income needed for housing costs: your mortgage payment, property taxes, heating and half of any condo fees. Total Debt Service (TDS) adds all your other debt payments, such as car loans, credit cards and lines of credit. Lenders set maximum limits for both ratios, and the calculations use the stress test qualifying rate rather than your actual rate. A pre-approval is the best way to know your real budget.

The stress test confirms you could still afford your payments if interest rates rise. You must qualify at the higher of your contract rate plus 2% or the minimum qualifying rate set by federal regulators. It applies to all insured mortgages and to mortgages from federally regulated lenders, and many other lenders follow similar rules. Your actual payments are based on your contract rate; the higher rate is only used to qualify.

The minimum depends on the purchase price. Homes can be purchased with as little as 5% down, with a higher percentage required on the portion of the price above a set threshold. Homes priced above the maximum for mortgage default insurance require at least 20% down, and rental properties you will not live in usually require at least 20% down as well. A mortgage professional can calculate the exact minimum for the home you have in mind.

Mortgage default insurance, often called CMHC insurance, is required when your down payment is less than 20% of the purchase price. It protects the lender if a mortgage goes into default, and it is what allows buyers to purchase with as little as 5% down. It is provided by CMHC, Sagen and Canada Guaranty, and is only available on homes below a maximum purchase price set by the federal government.

The premium is a percentage of your mortgage amount, and the smaller your down payment, the higher the premium. A longer amortization can also add a small surcharge. The premium is usually added to your mortgage balance rather than paid upfront. Some provinces charge sales tax on the premium, which must be paid at closing and cannot be added to the mortgage.

Yes. Most lenders accept a gifted down payment from an immediate family member, such as a parent, grandparent or sibling. You will need a signed gift letter confirming the money is a true gift that does not need to be repaid, along with proof the funds are in your account before closing. Requirements vary by lender.

Yes. The Home Buyers' Plan (HBP) lets eligible first-time buyers withdraw RRSP savings tax-free toward a home, up to a set limit per person, so a couple buying together can each make a withdrawal. The amount is repaid to your RRSP over 15 years, starting after a grace period. Any required repayment you miss is added to your taxable income for that year.

An FHSA is a registered account designed for first-time buyers. You can contribute up to an annual limit, to a lifetime maximum. Contributions are tax-deductible like an RRSP, and qualifying withdrawals to buy a home are tax-free like a TFSA, with nothing to repay. An FHSA can be combined with the Home Buyers' Plan for the same purchase.

A pre-approval is a lender's review of your income, credit, debts and down payment to confirm how much you can borrow. It usually includes a rate hold, typically 90 to 120 days, which protects you if rates rise while you shop. A pre-approval is not a final approval. The lender still needs to review the property and confirm your documents once you have an accepted offer.

A fixed rate stays the same for your entire term, so your payments are predictable. A variable rate moves with the lender's prime rate, which follows changes to the Bank of Canada's policy rate. Variable rates can save money when rates fall but carry more risk when they rise, and they usually have lower prepayment penalties. The right choice depends on your budget, comfort with risk and plans for the property.

The term is the length of your current mortgage contract, commonly 1 to 10 years, with 5 years being the most popular. Your rate and conditions are set for the term. The amortization is the total time it will take to pay off the mortgage completely, often 25 or 30 years. Most homeowners go through several terms, renewing each time, before the mortgage is fully paid off.

It depends on your down payment and situation. Insured mortgages (less than 20% down) have a federal maximum amortization, with longer amortizations available to some buyers, such as first-time buyers and buyers of newly built homes. Uninsured mortgages (20% or more down) generally allow longer amortizations, depending on the lender. A longer amortization lowers your payment but increases the total interest you pay over time.

An open mortgage lets you pay off any amount at any time without a penalty, but it comes with a higher interest rate. A closed mortgage has a lower rate but limits how much extra you can pay each year, and charges a penalty if you break it early. Most borrowers choose a closed mortgage and use its prepayment privileges to pay it down faster.

Common options include switching to accelerated bi-weekly or weekly payments, increasing your regular payment, and making lump-sum payments. Most closed mortgages allow prepayments of 10% to 20% of the original balance each year without a penalty. Even small increases can take years off your amortization and save a significant amount of interest.

For variable-rate mortgages, the penalty is usually three months' interest. For fixed-rate mortgages, it is usually the greater of three months' interest or the interest rate differential (IRD), which reflects the difference between your rate and the lender's current rate for the time left on your term. IRD penalties can be large and each lender calculates them differently, so it is worth getting a penalty quote before breaking a mortgage early.

Plan for roughly 1.5% to 4% of the purchase price. Costs commonly include legal fees and disbursements, title insurance, a home inspection, an appraisal if required, adjustments for property taxes and utilities, moving costs, and provincial land transfer tax or registration fees, depending on where you buy. Lenders want to see these funds available in addition to your down payment.

In most cases, yes. A home inspection gives you a professional review of the home's condition, including the structure, roof, plumbing, electrical and heating, before you are fully committed to the purchase. It can uncover costly issues, give you room to negotiate repairs or price, and show you what maintenance to plan for. Making your offer conditional on a satisfactory inspection protects you if serious problems are found.

Most lenders ask for government-issued photo ID, a recent pay stub, an employment letter, your two most recent T4s and Notices of Assessment, and 90 days of bank statements showing your down payment. Self-employed borrowers typically provide two years of T1 Generals and Notices of Assessment, plus business documents. For a purchase, you will also need the accepted offer; for a refinance or renewal, a recent mortgage statement and property tax bill.

Canadian credit scores range from 300 to 900 and are reported by Equifax and TransUnion. Insured mortgages generally require at least one borrower to have a score of 600 or higher, and the best rates usually go to scores of 680 and up. Alternative and private lenders can help borrowers with lower scores, typically at higher rates.

A credit score is a three-digit number from 300 to 900 that reflects how reliably you manage credit. In Canada, scores are calculated by Equifax and TransUnion based on your payment history, how much of your available credit you use, the length of your credit history, the types of credit you have and recent credit applications. Paying on time and keeping balances well below your limits are the best ways to build a strong score. You can check your credit reports for free with both bureaus.

Yes. Lenders typically want at least two years of self-employment history, supported by T1 Generals and Notices of Assessment. If business write-offs keep your taxable income low, some lenders offer business-for-self programs that look at your actual earnings, usually with a larger down payment. A broker can match you with lenders experienced with self-employed income.

Often, yes. With traditional lenders, you generally need to be discharged and have re-established credit for about two years, with on-time payments on new accounts. Alternative and private lenders can sometimes help sooner, typically at higher rates and with a larger down payment. Rebuilding your credit during the term can help you move to a better rate at renewal.

At the end of your term, your lender will send a renewal offer. You can accept it, negotiate, or move to a different lender. Renewal offers are not always the best rate available, so it is smart to start reviewing your options about four months before your maturity date. Many lenders allow you to secure a new rate up to 120 days in advance.

Often, yes. Federal rules have allowed borrowers to move an existing mortgage to a new lender at renewal, without increasing the amount or extending the amortization, without requalifying under the stress test. The new lender still reviews your application, and borrowing more or changing the amortization requires full qualification. A mortgage professional can confirm how the current rules apply to you.

Refinancing replaces your current mortgage with a new one, often to access home equity, consolidate debt, fund renovations or secure a better rate. You can generally borrow up to 80% of your home's appraised value, minus what you currently owe. Refinancing before the end of your term may trigger a prepayment penalty, so compare the savings against the costs first.

A HELOC is a revolving line of credit secured by your home. You can borrow, repay and borrow again up to your limit, and you only pay interest on what you use. With most lenders, the line itself can be up to 65% of your home's value, and your mortgage and HELOC combined can be up to 80%. HELOC rates are usually variable and tied to the lender's prime rate.

Yes. A purchase plus improvements mortgage lets you add the cost of renovations to your mortgage when you buy. The lender bases the mortgage on the home's value after the improvements, and your down payment is calculated on the purchase price plus the renovation cost. You will need contractor quotes before closing, and the renovation funds are typically held by your lawyer or notary until the work is complete and confirmed. Limits on the renovation amount vary by lender and insurer.

Many mortgages are portable, which means you can transfer your current rate and balance to a new property without paying a penalty. If you need more money for the new home, lenders usually blend your existing rate with a current rate on the additional amount. Portability rules and timelines vary by lender, so review your terms before you sell.

Yes. If you will not live in the property, you will generally need at least 20% down. If you will live in one unit of a 2 to 4 unit property, you may qualify for an insured mortgage with a smaller down payment. Lenders may count part of the expected rental income when qualifying you, and the rules vary by lender.

Yes. Many lenders offer newcomer programs for permanent residents and some work permit holders, even with limited Canadian credit history. Some programs accept as little as 5% down with proof of Canadian employment and alternative credit references, while others require more. Rules on property purchases by non-Canadians can change, so speak with a mortgage professional about your specific situation.

On closing day, your lender sends the mortgage funds to your lawyer or notary, who combines them with your down payment and closing costs, pays the seller, and registers the property and mortgage. Once everything is complete, you receive the keys. You will usually meet with your lawyer or notary a few days before closing to sign documents and provide your remaining funds.