Mortgage Basics Tips

Every smart home buyer knows it’s not just the asking price that matters; it’s whether you can actually afford it. The mortgage stress test was introduced in 2018 to check that. Read our “mortgage stress test explained” guide to understand how it works, what rates lenders use, how it impacts your borrowing power, and how to prepare for it. What Is the Mortgage Stress Test? The mortgage stress test in Canada makes sure you can afford your mortgage payments if interest rates rise. Lenders don’t...

According to Forbes Advisor Canada, about 3% of mortgage renewals are denied in the country. The million-dollar question is: what happens if your mortgage renewal is denied? Keep reading to see why mortgage renewals are denied in the first place, how you can avoid this situation, and what are your options in case of denial. Why Would Your Mortgage Renewal Be Denied? Banks can deny mortgage renewals due to credit score issues, missed mortgage payments and/or arrears, changes in income or emplo...

When looking for a mortgage in Canada, you'll mainly come across two types of lenders: A lenders vs private lenders. But which one is the smarter option? In this guide, we’re going to walk you through what each lender requires, how their interest rates and loan structures differ, and scenarios where one may be better than the other. What Is an A Lender (Traditional Lender)? An A lender, also known as a traditional lender, is a major financial institution (like banks, credit unions, and large...

Mortgage brokers are responsible for more than 40% of residential mortgage originations in Canada, and demand for their services continues to grow. But before hiring, you should know what a home loan broker is, what they do, the pros and cons of working with them, and how you can find the best broker. What Does a Mortgage Broker Do? Let’s start with the basics and define mortgage broker first. What is a home loan broker? They're like your shopping agents for mortgages. They are intermediaries...

Should the stress test be required for renewal? Here’s the short answer: if you stay with your current lender, no; if you’re switching to a new lender, yes. For the long, comprehensive answer (when it’s required, current stress test rules in Canada, pros & cons, and how it affects you as a buyer), scroll through the next parts. What Is the Mortgage Stress Test? The mortgage stress test is a lender check that ensures borrowers can afford mortgage payments even if interest rates rise. The quali...

If your savings aren’t quite enough to get approved, a borrowed down payment seems like a practical shortcut. But is it really your best option? This article breaks down everything from the “how it works” to the “pros & cons” and alternative strategies to help you make a smart decision. What Is a Borrowed Down Payment? A borrowed down payment is when some or all of the money you use to meet a mortgage down-payment requirement comes from borrowed sources (instead of your own savings). When put...

Need extra funds or better terms on your home loan? If yes, you should know about refinance vs HELOC vs second mortgage. Refinance has lower rates; HELOC offers ongoing access; and second mortgage provides a large lump sum without touching the first mortgage. But which is best for you? In today’s blog, we break down these three (along with their pros and cons) so you can choose what works best for you. What Is a Mortgage Refinance? Mortgage refinancing options allow you, the homeowner, to rep...

If you have bought your house by taking on a huge loan like many people do, you have probably wondered about mortgage amortization and how it really works. Today, we are here to explain the concept as well as we can, so you will completely understand the meaning of mortgage amortization by the end of this article. What Is Mortgage Amortization? Mortgage amortization is the process by which the borrower slowly pays off the home loan they have taken on a regular basis for a period that typically...

If your mortgage term is about to end, you might be wondering whether you can negotiate better conditions or if you should just agree with whatever terms the lender offers you. In that case, you’re in the right place. This post will go over everything you need to know before renewing your mortgage. What Is a Mortgage Renewal? All house mortgages have an amortization period, which is the total amount of time it is going to take you to pay off the entirety of the loan amount (usually very long,...

Thinking of taking out a mortgage to buy a house of your own, but you are not sure you can afford it in the long run? In that case, you need that mortgage to be stress tested to make certain that you will not run into any serious financial crisis in the future. We are going to tell you everything essential to know about the mortgage stress test and how it’s done. What Is The Mortgage Stress Test In Canada? The Canadian mortgage stress test was introduced by the Office of the Superintendent of...