FAQs
faqs
Most Popular Questions
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What is the minimum down payment required?
In Ontario, you can buy a primary residence, second home, or cottage with as little as 5% down payment, provided you have decent credit. For homes valued up to $500K, you need 5% down. For homes over $500K, you'll need 10% on the amount above $500K. Homes priced over $1 million require a 20% down payment.
What credit score is needed for a mortgage?
Most lenders in Canada require a minimum credit score of 600-680, but a higher score (above 700) will give you access to better mortgage rates.
What is the mortgage stress test?
The mortgage stress test requires borrowers to qualify at a higher rate than the actual mortgage rate, typically the greater of the Bank of Canada's 5-year benchmark rate or 2% above the contracted rate. This ensures borrowers can withstand potential interest rate increases.
What are the debt service ratios lenders look at?
Lenders consider the Gross Debt Service (GDS) ratio, which should be below 39% of your income, and the Total Debt Service (TDS) ratio, which should be below 44% of your income.
What happens if I can't make my mortgage payments?
Contact your lender immediately if you're having financial difficulties - they may be able to provide options like deferring payments or extending the amortization.
What documents are required for a mortgage application?
Common documents needed include proof of income (pay stubs, tax returns), employment letter, credit report, down payment proof, asset/liability statements, and identification.
Can I get pre-approved for a mortgage?
Yes, getting pre-approved is recommended as it gives you an estimate of your maximum mortgage amount and shows sellers you're a serious buyer.
How can I pay off my mortgage faster?
Strategies include increasing your regular payment amount, making lump sum payments, accelerated bi-weekly payments, and speaking to your lender about prepayment options.
What is mortgage loan insurance?
If your down payment is less than 20%, you'll need mortgage default insurance from CMHC or a private insurer, which protects the lender if you default.
Can I port my mortgage to a new home?
Many lenders allow you to "port" or transfer your existing mortgage to a new property, avoiding penalties for breaking your term.
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