Mortgage Guide
Everything you need to know about financing a home, from loan types to the closing process. Empower yourself with knowledge before making one of life's biggest financial decisions.
Knowledge is your most valuable asset before signing.
- Best for: Borrowers with good credit (620+) and at least 3% down.
- Pros: Generally lower costs over the life of the loan; PMI can be canceled once you reach 20% equity.
- Cons: Stricter credit requirements than government-backed loans.
- Best for: First-time buyers and those with lower credit scores (580+).
- Pros: Requires only 3.5% down payment; more lenient credit requirements.
- Cons: Requires mortgage insurance premium (MIP) for the life of the loan in most cases.
- Best for: Active-duty military, veterans, and eligible spouses.
- Pros: 0% down payment required; no PMI; competitive interest rates.
- Cons: Requires a one-time VA funding fee; strict property requirements.
- Best for: Buyers looking at high-priced properties exceeding FHFA limits (typically over $766,550 in 2024).
- Pros: Allows you to finance luxury homes without multiple loans.
- Cons: Requires higher credit scores (typically 700+), larger down payments, and more cash reserves.
Canadian Mortgage Guide: What Every Homebuyer Needs to Know
Getting a mortgage in Canada involves more steps than many first-time buyers expect. The process begins with mortgage pre-approval — a lender's conditional commitment to lend you a specific amount, typically valid for 90–120 days. Pre-approval locks in your interest rate while you shop for a home and signals to sellers that you're a serious buyer. To get pre-approved, you'll need to provide proof of income (T4s, pay stubs, NOAs), bank statements, and consent for a credit check. Most major Canadian banks and mortgage brokers offer pre-approval online in under an hour.
Fixed vs. variable rate mortgages is the most common question Canadian borrowers face at renewal. Fixed rates give you payment stability — ideal if you're on a tight budget or expect rates to rise. Variable rates have historically cost less over the full amortization period, but require comfort with payment fluctuations as the Bank of Canada adjusts its overnight rate. In May 2026, with the BoC rate at 2.25% and inflation near target, many analysts expect rates to hold or decline slightly — a potentially favourable environment for variable-rate borrowers.
Mortgage renewal in Canada is a critical event most borrowers underestimate. When your term ends (typically after 5 years), your mortgage doesn't — you must renew at the current market rate for the remaining amortization. If rates have risen since you first borrowed, your monthly payment will increase even if your principal has declined. Start shopping for renewal rates 120 days before your maturity date — you can lock in a rate early without penalty, and switching lenders at renewal carries no prepayment penalties, giving you full negotiating leverage.
Understanding prepayment privileges can save Canadian homeowners tens of thousands of dollars in interest. Most Canadian mortgage contracts allow you to prepay 10–20% of the original principal per year without penalty, and increase your regular payment by the same percentage. Even small additional payments in the early years of your amortization — when most of your payment is interest — dramatically reduce your total interest cost. Use HomeWise's amortization schedule to model the impact of lump-sum prepayments on your payoff timeline.