Why Choose a Mortgage Broker?
A licensed mortgage specialist who has access to multiple lenders and mortgage rates. A mortgage broker can find the right mortgage product for you, negotiate a better rate on your behalf and pass on volume discounts to you.
Fixed versus Variable
With a variable rate mortgage, the interest rate can fluctuate along with any changes in our Mortgage Prime Rate. Your principal and interest payments will stay the same for the term, but if the Mortgage Prime Rate goes down, more of your payment will go towards the principal. If the Mortgage Prime Rate goes up, more will go towards interest.
Rent versus Buy
What is CMHC?
What is LTV?
A term used to express the ratio of your mortgage loan compared to the value of the property. For example, if you borrow $300,000 to purchase a $350,000 home, your LTV ratio is $300,000 / $350,000 or 86%. To make up the full 100%, you would have to make a 14% (100% – 86%) down payment, which in this case would be $50,000. The higher your LTV ratio is, the riskier your loan is for the lender.
What is GDS?
The debt service ratio calculation used to determine how much you can afford to pay each month to own a particular property. Your lender adds up your monthly mortgage payment, property taxes and utilities, and divides the total by your gross monthly income. If the answer equals less than 32 per cent (industry standard), your lender can feel confident in your ability to pay your monthly housing costs. The absolute maximum GDS allowed is 39%.
What is TDS?
The debt service ratio calculation used to determine how much you can afford to pay each month to own a property and fulfill your other debt commitments. Your lender adds up your monthly mortgage payment, property taxes, utilities and minimum debt repayments, and divides the total by your gross monthly income. If the answer equals less than 40 per cent (industry standard), your lender can feel confident in your ability to make all of your monthly payments. The maximum TDS allowed is 44%.
Tax Credits for New Home Buyers
Glossary of Mortgage Terms
Accelerated Bi-Weekly Mortgage Payment
When your monthly mortgage payment is divided by two and the amount is withdrawn from your bank account every two weeks. In total, you make 26 payments per year, but the payment amount is slightly higher than a regular bi-weekly mortgage payment.
Accelerated Weekly Mortgage Payment
When your monthly mortgage payment is divided by four and the amount is withdrawn from your bank account every week. In total, you make 52 payments per year, but the payment amount is slightly higher than a regular weekly mortgage payment.
Agreement of Purchase and Sale
The contract between the buyer and the seller of a home. The agreement of purchase and sale outlines the terms and conditions both the buyer and seller promise to abide by when the property is sold, including the purchase price, property features included in the price, closing date and more.
The length of time it takes you to pay off your mortgage in full. The maximum amortization period in Canada is 25 years for high-ratio mortgages (those that require CMHC insurance), and can go up to 35 years for conventional mortgages.
The valuation of a property, used to determine the market value. There are a number of times you may choose to get a home appraisal, including: when you’re buying a home, selling a home, refinancing, taking out equity, and even when you’re appealing a property tax assessment.
A mortgage that can be transferred from the seller to the buyer. When assuming a mortgage, the buyer also needs to pay the seller the difference between their purchase price and what’s leftover on the mortgage.