Related Information

• Mortgage FAQ

  Frequently Asked Questions About Mortgages and Line-of-Credit Loans

  In this FAQ, we answer the most common questions asked about mortgages and line-of-credit loans. If you have any specific questions, send us an email and we would be pleased to help.

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  How much of a down payment is required to purchase a home?

  A purchaser can buy with a 0% down payment, however price restrictions may apply. CMHC or GEMICO may insure the mortgage against default for up to 100% of the lending value of the house. Mortgages with less than 25% down must have Mortgage Loan Insurance provided by either CMHC or GE.

  What is a pre-approved mortgage?

  A pre-approved mortgage puts your financing in place before you make an offer on a home. Usually, the sale of a home is contingent upon the buyer securing the required financing within an agreed-upon time frame. If you are unable to do so, the sale could fall through. With a pre-approved mortgage, you’ll be able to make a firm offer for the home of your choice. And as most Realtors will tell you, a firm offer adds an awful lot of leverage to price negotiations!

  What is the difference between an open and closed mortgage?

  An open mortgage allows you the flexibility to pay down the principal amount at any time whereas a closed mortgage restricts the amount of paydown of the principal amount. In some cases, a closed mortgage may be discharged at a defined cost using a set formula to determine an Interest Rate Differential (IRD).

  What is a convertible mortgage?

  This allows you to convert your mortgage to a new one of longer-term while it is still in effect.

• Using Your RRSP to Purchase a Home

  Using Your RRSP to Purchase a Home

  Did you know that as a first-time homebuyers, you can use your RRSP as part of the Home Buyers Plan.

  Here’s how it works

  If you qualify as a first time home buyer the Home Buyers’ Plan (HBP) allows you a withdrawl of up to $25,000 from RRSPs for a home purchase. The withdrawn amount will then have to be repaid within 15 years and would be subject to a minimum annual repayment that is 1/15 of the amount withdrawn. If for instance, you withdraw the full $20,000, the minimum annual repayment is $1,333 per year. If less than the minimum is repaid in any particular year, then the balance is added to your taxable income for that year.

  Get Started

  Calculate the amount of mortgage you can qualify for based on your available down payment including the option of using the Home Buyers Plan.

  Mortgage calculator

• Choosing a Mortgage that's Right for You

  Choosing a Mortgage that’s Right for You

  Today, more than ever, there are numerous options available to you when applying for a mortgage loan. Here are some of the key things you need to consider.

  Mortgage categories

  Fixed-rate

  6 month, 1, 2 & 3 year (open, closed and closed – convertible) 4, 5, 7 & 10 year closed

  Variable-rate

  3, 4 and 5 year (open, closed, closed-convertible and capped)

  Split-term

  Combination of all possible terms (6 month through 10 years)

  What terms and payment options should you choose?

  There are advantages in choosing short-term rates or long-term rates. It all depends on what you want.

  Short-term mortgage rates

  If you anticipate that rates will remain low and stable, and you are prepared to chance increases, then you may want to arrange a short term mortgage. By rolling over your term say, every 6 months or float your rate against prime, with the option of locking in to a longer term at a later date, you can save with a lower rate using a short-term mortgage. But be prepared, a sudden upward movement in rates could have a significant impact on your payments.

  Long-term mortgage rates

  Generally a term of 3 years or more would be considered long term when you’re choosing a mortgage. Often long-term rates are higher than short-term rates. When choosing a long-term rate, you avoid rate increases because your rate will be locked in. This option offers certainty of your payments allowing you to manage your expenses accordingly.

  Using a split-term mortgage for the ultimate flexibility

  With a split-term mortgage, your interest rate risk is diversified by splitting your mortgage into parts. For instance, you could split a $100,000 mortgage into four $25,000 parts with interest rate terms of 6 months, 1, 2, and 3 year terms negotiated at the best rates.

  Prepayment options to suit your needs

  Many lenders will structure a mortgage to suit your needs. You can make lump sum payment – usually 10% to 20% of the original principal balance or double-up a payment.

  Accelerate your mortgage pay down with flexible payment changes

  With payment changes, the amortization can be adjusted by increasing the payment on closed terms by 10% – 20% per year, generally once annually on the anniversary of the term.

  Payment Frequency

  Pay your mortgage with the frequency that matches your cash flow. Most mortgages allow weekly, bi-weekly or semi-monthly payments. Take advantage of the weekly and bi-weekly payments to accelerate the principal pay down and reduce the amortization. You will be surprised with the effect it will have in