🏡 First‑Time Homebuyers

What is mortgage pre‑approval?

Mortgage pre‑approval is a lender’s written estimate of how much you can borrow based on your income, credit, debts, and financial profile. It gives you a clear price range, strengthens your offer, and helps lock in a rate for up to 120 days.

How much down payment do I need in Ontario?

Most buyers need 5% down on the first $500,000 of the purchase price and 10% on the portion above. Homes over $1M require 20% down. Your down payment can come from savings, RRSPs (via the Home Buyers’ Plan), or eligible gifts.

What closing costs should I expect?

Closing costs typically range from 1.5% to 4% of the purchase price. These include land transfer tax, legal fees, title insurance, appraisal fees, and adjustments. First‑time buyers may qualify for rebates that reduce these costs.

Can I use my RRSP for a down payment?

Yes. Through the Home Buyers’ Plan (HBP), you can withdraw up to the CRA‑approved limit from your RRSP tax‑free to use toward your down payment, as long as you repay it over the required period.

💳 Mortgage Qualification

How much can I qualify for?

Your mortgage qualification is based on income, credit score, debts, down payment, and the stress test rate. Lenders calculate your GDS and TDS ratios to determine affordability. A quick pre‑approval gives you an accurate number.

What documents do I need for approval?

Most lenders require:

• Government ID

• Income documents (pay stubs, T4s, NOAs)

• Employment letter

• Down payment proof

• Bank statements

• Credit report (pulled by the lender)

Self‑employed clients may need additional financials.

How does my credit score affect my mortgage?

A stronger credit score helps you access better rates, more lender options, and smoother approvals. Most lenders prefer scores above 650, but alternative solutions exist for lower scores.

📉 Rates & Mortgage Products

What’s the difference between fixed and variable rates?

A fixed rate stays the same for your entire term, offering stability and predictable payments. A variable rate can change with the lender’s prime rate, often starting lower but fluctuating over time.

How does a mortgage broker get better rates?

Brokers work with multiple lenders — including banks, credit unions, and monoline lenders — to compare products and negotiate competitive rates. This gives you access to options you won’t find by visiting a single bank.

What is a rate hold?

A rate hold protects today’s rate for up to 120 days while you shop for a home. If rates rise, you’re protected; if they drop, you get the lower rate.

🔁 Renewals & Refinancing

When should I renew my mortgage?

Most renewals happen every 1–5 years. It’s best to review your options 120 days before your renewal date so you can negotiate better terms or switch lenders without penalties.

What is a refinance and how does it work?

Refinancing replaces your current mortgage with a new one — often to access equity, consolidate debt, change your rate type, or adjust your amortization. It can help lower payments or unlock funds for renovations or investments.

Can I refinance to consolidate debt?

Yes. Many homeowners refinance to combine high‑interest debt (credit cards, loans) into one lower‑interest mortgage payment, improving monthly cash flow and reducing overall interest costs.

🧾 Payments, Penalties & Terms

What is a mortgage term?

Your mortgage term is the length of time your rate and contract are in effect — usually 1 to 5 years. At the end of each term, you renew or renegotiate.

What is amortization?

Amortization is the total time it takes to fully pay off your mortgage, typically 25–30 years. A longer amortization lowers your monthly payment but increases total interest paid.

Are there penalties for breaking a mortgage early?

Yes. Fixed‑rate mortgages usually charge an Interest Rate Differential (IRD) penalty, while variable mortgages typically charge three months’ interest. The cost depends on your lender and remaining term.

🏦 Working With a Mortgage Broker

Do I pay a fee to use a mortgage broker?

For most residential mortgages, there is no fee. Brokers are paid by the lender. Fees may apply for private or complex financing, and these are always disclosed upfront.

Why should I use a mortgage broker instead of a bank?

Brokers offer:

• Access to multiple lenders

• Competitive rates

• Tailored advice

• Faster approvals

• Support throughout the entire process

It’s a more personalized and flexible experience.

Can you help if I’m self‑employed?

Absolutely. There are lender programs designed specifically for business owners, contractors, and commission‑based earners. These options consider alternative income documentation and flexible qualification methods.