Here you will find answers to a few basic questions


There are several variables involved when calculating the maximum loan lenders will provide you. Some of these factors include; income versus expenses, down payment, credit score, and the property itself. Use our Mortgage Calculator for an estimate as to what you can quality for. 

A minimum down payment of 5% is required to purchase a home, subject to certain maximum price restrictions. In addition to the down payment, you must also be able to show that you can cover the applicable closing costs. Regardless of the amount of your down payment, at least 5% of it must be from your own cash resources or a gift from a family member.

A pre-approved mortgage provides an interest rate guarantee from a lender for a specified period of time (usually up to 120 days) and for a set amount of money. The pre-approval is calculated based on information provided by you and is generally subject to certain conditions being met before the mortgage is finalized. Conditions examples would usually be things like ‘written employment and income confirmation’ and ‘down payment from your own resources’.

The down payment is that portion of the purchase price you furnish yourself. The amount of the down payment (which represents your financial stake, or the equity in your new home) should be determined well before you start house hunting.

Most lenders now offer insured mortgages for both new and resale homes with lower down payment requirements than conventional mortgages – as low as 5%. Low down payment mortgages must be insured to cover potential default of payment, and their carrying costs are therefore higher than a conventional mortgage because they include the insurance premium.

If you are a first-time home buyer, the Home Buyers Plan (HBP) allows you to withdraw money from your Registered Retirement Savings Plan (RRSP) tax-free to make your down payment. The HBP is administered by the Canada Revenue Agency (CRA). There are certain conditions you must meet to be eligible for the HBP. For more information, contact CRA at You can withdraw up to $25,000 from your RRSP. If you buy the home together with your spouse, partner, or someone else, each of you can withdraw up to $25,000, for a total of up to $50,000. You do not have to start paying back the money to your RRSP until two years after the purchase of the home. You must pay back all withdrawals from your RRSP within 15 years by making RRSP deposits each year, starting the second year following your withdrawal. Source: Financial Consumer Agency of Canada.

First and foremost, you have to make sure you have enough money for a down payment – the portion of the purchase price that you furnish yourself. To qualify for a conventional mortgage you will need a down payment of 20% or more. However, you can qualify for a low down payment insured mortgage with a down payment as low as 5%. Secondly, you will require money for closing costs. Majority of lenders will want to confirm that you have up to 5% of the basic purchase price for closing costs.

Examples of closing costs:

  • Home inspection
  • Lawyer or notary fees and disbursements
  • Adjustment costs between buyer and seller
  • Land transfer tax (depending on where you live)
  • Property insurance
  • Moving costs
  • Appliances, garden tools, cleaning materials, etc (factor these expenses into your initial costs)

The interest rate on a fixed-rate mortgage is set for a predetermined term – usually between 6 months to 10 years. This offers the security of knowing what you will be paying for the term selected.

A variable-rate mortgage is a mortgage loan where the interest rate is adjusted based on Prime. Prime rate can vary throughout the calendar year, based on the Bank of Canada’s economic forecast. Typically, lenders will offer a discount off of Prime that is guaranteed for the term selected.

Example: 5-year variable at prime less 0.50% would fluctuate only if Prime changed, but the 0.50% discount would remain the same during the 5-year term. Historically variable rate mortgages have performed better than fixed but does still have the risk of rate fluctuations during the term of the mortgage.



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