Frequently Asked Questions

To determine affordability you'll need your taxable income, outstanding debts, and monthly payments. Lenders use two key calculations:

32% Rule (GDS): 32% of your gross income can go toward mortgage payment, property taxes, heating costs, and half of any condo fees.

40% Rule (TDS): 40% of your gross income minus all monthly debt payments (car loans, credit cards, lines of credit). The lesser of the two determines your mortgage limit.

Beyond what the ratios say — always calculate what you're comfortable paying. Don't leave yourself house poor.

A minimum down payment of 5% is required for homes under $500,000. For homes between $500K–$999,999, it's 5% on the first $500K and 10% on the remainder. Homes over $1M require 20% down.

Important rules:

• At least 5% must come from your own savings or a family gift — it cannot be borrowed.
• A gift from a family member is acceptable with a signed gift letter confirming it's not a loan.
• If CMHC insures the mortgage, gift funds must be in your account before approval.

The down payment is the portion of the purchase price you provide yourself. It represents your initial equity in the home.

The larger your down payment, the less your home costs over time — a smaller mortgage means less interest paid. Determine your down payment amount before you start house hunting so you know your price range.

Yes — most lenders accept down payment funds gifted from a family member. You'll need a gift letter signed by the donor confirming the funds are a true gift, not a loan.

Where CMHC mortgage insurance is involved, the gift money must be in your possession before the application is submitted.

Insured mortgages allow as little as 5% down for both new and resale homes. Low down payment mortgages must be insured (CMHC) to protect against default — this means slightly higher carrying costs due to the insurance premium.

You are responsible for: appraisal and legal fees, an insurance application fee, and the mortgage default insurance premium (which can be added to the mortgage amount).

Beyond the down payment, budget for:

• Closing costs — up to 2.5% of the purchase price (legal fees, land transfer tax, title insurance)
• Home inspection fee — strongly recommended
• Legal fees — shop around as these vary
• Property insurance — required by closing date
• Moving costs
• Initial purchases — appliances, tools, supplies, etc.

Factor all of these into your upfront budget.

A fixed-rate mortgage locks in your interest rate for a pre-determined term — typically 6 months to 5 years (up to 10 years with some lenders). This gives you the security of knowing exactly what you'll pay for the entire term, making budgeting straightforward.

A variable rate mortgage has payments that are fixed for a period, but your interest rate fluctuates with market conditions month to month.

• If rates drop → more of your payment goes to principal
• If rates rise → more goes to interest

Open variable rate mortgages allow prepayment of any amount on any payment date, giving maximum flexibility.

A conventional mortgage is one where the down payment is 20% or more of the purchase price — a loan-to-value (LTV) of 80% or less. Conventional mortgages do not require CMHC mortgage loan insurance.

Mortgage loan insurance (CMHC insurance) is required by law when your down payment is less than 20%. It protects the lender — not you — against default.

Premiums range from 2.80% to 4.00% of the mortgage amount and can be added directly to your mortgage. This is not the same as mortgage life insurance.

Mortgage terms range from 6 months to 10 years. As a general rule: shorter terms = lower rates; longer terms = higher rates but more certainty.

Consider a longer term if: you want stability, you're a first-time buyer, or you believe rates will rise.
Consider a shorter term if: you plan to sell soon, you think rates will fall, or you want more flexibility.

Most Canadians choose 4 or 5-year fixed terms.

Monthly homeownership costs include:

• Mortgage payment — usually the largest expense
• Property taxes — can be included in your mortgage payment
• School taxes — collected separately in some municipalities
• Utilities — heating, electricity, water, internet, cable
• Maintenance — roof, plumbing, electrical, landscaping, snow removal

Budget for all of these when calculating what you can truly afford.

A pre-approved mortgage is an interest rate guarantee from a lender for a specific amount, typically valid for 90–120 days.

It's calculated based on your income, debts, and credit, and is subject to conditions like written employment confirmation and down payment verification.

Most real estate agents will want you pre-approved before showing you homes — it ensures you're looking in the right price range and makes your offer more competitive.

A home inspection is a visual examination of the property covering all major components: roof, foundation, walls, floors, electrical, plumbing, heating, drainage, and more. The inspector provides a written report within 24 hours.

We highly recommend a home inspection. It identifies major issues before you buy, gives you negotiating power, and provides significant peace of mind.

Yes! A purchase-plus-improvements mortgage lets you roll renovation costs directly into your mortgage. This is available for both conventional and high-ratio (insured) mortgages.

• Cosmetic improvements: standard insurance premium
• Structural improvements: premium increased by 0.50%

This eliminates the need to finance renovations separately at a higher rate.

There are several proven strategies to pay down your mortgage faster and save significantly on interest:

• Increase payment frequency — switch from monthly to bi-weekly or weekly accelerated payments
• Make lump-sum prepayments — most mortgages allow annual prepayments of 10–20% of the original balance
• Increase your regular payment amount — even a small increase makes a big difference over time
• Choose a shorter amortization at renewal

No — you can start shopping 4–6 months before your renewal date. Many lenders will guarantee a rate that far in advance at no cost to you.

The renewal notice your current lender sends is rarely their best rate — it's typically their posted rate. Always shop around or contact a broker. If rates drop before your maturity date, the new lender will usually adjust your rate downward.

The Home Buyers' Plan (HBP) lets first-time buyers withdraw up to $35,000 from their RRSP tax-free for a down payment. Couples can each withdraw $35,000 for a combined $70,000.

Repayment rules:

• Repayments start 2 years after your purchase
• Must be repaid within 15 years
• Any annual amount not repaid is added to your taxable income for that year

Bankruptcy does not permanently bar you from getting a mortgage. Depending on the circumstances, some lenders will consider financing after discharge.

Generally, A-lenders require 2 years post-discharge with rebuilt credit (score 650+). Alternative and private lenders may work with you sooner. I can help you understand your options and build a roadmap back to mortgage qualification.

If you pay child support: The amount paid is typically deducted from your total income before calculating your mortgage qualification amount.

If you receive child support: The amount received can often be added to your qualifying income, provided you have documented proof of regular receipt over a period determined by the lender.