Question 1

How much down payment do I need in Canada?

Accepted Answer

You need 5% for homes under $500,000, 5% plus 10% on the portion up to $1.5 million, and 20% for homes above $1.5 million.

Question 2

Can I buy a home with bad credit in Canada?

Accepted Answer

Yes. Many lenders offer alternative or private mortgage options for borrowers with lower credit scores, though interest rates may be higher.

Question 3

What credit score do I need to get approved?

Accepted Answer

Most lenders prefer a credit score of 680 or higher for the best rates, but approvals are still possible with lower scores.

Question 4

How much mortgage can I afford?

Accepted Answer

It depends on your income, debts, and interest rates. Most lenders allow up to 39% of income for housing costs and 44% for total debt.

Question 5

What is the mortgage stress test in Canada?

Accepted Answer

You must qualify at the higher of 5.25% or your mortgage rate plus 2%, even if your actual rate is lower.

Question 6

Should I choose a fixed or variable mortgage?

Accepted Answer

Fixed mortgages offer stable payments, while variable rates can change with the market and may start lower.

Question 7

What is mortgage pre-approval and do I need it?

Accepted Answer

A pre-approval confirms your budget, locks in a rate for up to 120 days, and strengthens your offer when buying a home.

Question 8

How long does mortgage approval take?

Accepted Answer

Pre-approvals can take 24–72 hours, while full approvals typically take 1 to 2 weeks depending on your documents.

Question 9

Can I get a mortgage if I’m self-employed?

Accepted Answer

Yes. You may need two years of income history or use alternative lenders that accept bank statements or stated income.

Question 10

What is mortgage insurance (CMHC) and when is it required?

Accepted Answer

Mortgage insurance is required when your down payment is under 20% and is added to your mortgage cost.

Question 11

Can I switch lenders at renewal without requalifying?

Accepted Answer

Yes, in many cases, especially with insured mortgages, you can switch lenders at renewal to get a better rate.

Question 12

What happens when my mortgage renews?

Accepted Answer

At renewal, you can accept your lender’s offer, negotiate better terms, or switch lenders.

Question 13

What are closing costs in Canada?

Accepted Answer

Closing costs typically range from 1.5% to 4% of the purchase price and include legal fees, taxes, and inspections.

Question 14

What programs help first-time home buyers in Canada?

Accepted Answer

Programs include the FHSA, RRSP Home Buyers’ Plan, and various government incentives and rebates.

Question 15

Can I refinance my mortgage?

Accepted Answer

Yes. Most lenders allow refinancing up to 80% of your home’s value to access equity or consolidate debt.

Question 16

How do mortgage rates work in Canada?

Accepted Answer

Rates are influenced by the Bank of Canada, inflation, market conditions, and your credit and financial profile.

Question 17

What documents do I need for a mortgage?

Accepted Answer

You typically need ID, proof of income, employment details, down payment proof, and credit history.

Question 18

Can I get a mortgage after bankruptcy or consumer proposal?

Accepted Answer

Yes. You may need re-established credit, a larger down payment, and may need to use alternative lenders.

Question 19

Is 20% down required in Canada?

Accepted Answer

No. You only need 20% down for homes over $1.5 million or to avoid mortgage insurance.

Question 20

Can I get a 30-year mortgage in Canada?

Accepted Answer

Yes. Many lenders offer 30-year amortizations, especially for first-time buyers, to lower monthly payments.

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Kiki Berg, Senior Mortgage Planner