FAQ

How much mortgage can I afford: 

Usually a good rule of thumb is using the 28%/36% rule, which states that you shouldn’t spend more than 28% of your gross monthly income on home-related costs and 36% on total debts, including your mortgage, credit cards and other loans like auto and student loans. Do not hesitate to use our mortgage calculator to perform several financial simulations.

How does mortgage work: 

A mortgage is a loan that one uses in order to purchase property like a home for example.  Mortgages are usually taken out with banks or credit unions.  When taking a loan, the buyer will usually pay a part of the value of the property upfront and will use a mortgage to finance the rest.  Mortgage payments will be made bi-monthly or monthly with the purpose to pay back the loan while paying interest that was agreed upon.

How to get pre-approved for a mortgage: 

To get pre-approved for a mortgage, you will need to go to a mortgage lender or a mortgage broker.  They will need various information such as but not limited to your assets, level of debt and income.

What is a mortgage broker: 

A mortgage broker helps borrowers connect with lenders and seeks out the best fit in terms of the borrower’s financial situation and interest-rate needs. The mortgage broker also gathers paperwork from the borrower and passes that paperwork along to a mortgage lender for underwriting and approval purposes. The broker earns a commission from either the borrower, the lender, or both at closing.

Is mortgage interest tax deductible in canada: 

Mortgage interest payments are not tax deductible, that being said there are some specific circumstances, such as renting out your property to earn an income.

What is a down payment: 

Down payment, is an initial up-front partial payment for the purchase of expensive items/services such as a car or a house. Analyze the impact of your down payment on your monthly mortgage payments using our mortgage calculator.

Who pays the mortgage broker: 

A mortgage broker is paid via a commission from mortgage providers. When a broker connects a borrower with a lender, the broker will be paid a percentage of the loan amount by the lender. Mortgage brokers generally do not charge the borrower directly.

Why use a mortgage broker instead of a bank: 

There are many reasons to use a mortgage broker, the main ones being the following: chance at getting a better rate, they do the work/research for you and less paperwork. Check out our article for more information on the pros and cons of hiring a mortgage broker.

How to calculate mortgage payment: 

To calculate your mortgage payments you will need the total amount of your mortgage, your interest rate and the length of your mortgage amortization.

How to calculate mortgage interest: 

There’s various ways (some more complicated than others) to calculate your monthly interest.  Easiest one would be to head to our mortgage calculator and do the following calculations: (Purchase price – down payment) Divided by amortization divided again by 12 months.  Then you want to subtract that number from your monthly mortgage payments and the answer is the amount you pay monthly in interest.

How to calculate monthly mortgage payment:

The easiest way to calculate your mortgage payment is to go to our mortgage calculator and use our mortgage calculator tool. You will need the total purchase price, your down payment, your amortization period, your term period, your payment frequency and finally your interest rate.

How to calculate mortgage penalty:

Best way to calculate your mortgage penalty would be to reach out to your lender.  That being said, some things can bring your penalty up or down such as the time left on your mortgage terms, the value of your mortgage left to pay and your interest rate.

How to pay off mortgage faster calculator: 

There are various ways to pay off your mortgage faster, here are a few: refinancing to a shorter amortization period, making extra payments on your principal, making a lump-sum payment otherwise known as a mortgage recast. 

How much is a mortgage payment: 

Mortgage payments depend on your principal (total amount of mortgage), your mortgage rate, the frequency of your payments and the amortization period. Visit our mortgage calculator page to calculate your mortgage payment.

What is refinancing a mortgage:

Refinancing your mortgage is when you renegotiate different aspects of your mortgage agreement, but mostly your amortization period.

How does refinancing a mortgage work:

To refinance your mortgage you need to negotiate directly with your mortgage lender.

How early can you renew your mortgage:

You may qualify to renew your mortgage as early as 150 days before maturity. If you respect that time frame, lenders will often waive any prepayment charges or other fees, depending on the mortgage type and other incentives. Thirty days before renewal, is almost a bit too late and you should hurry up to renew your mortgage.

Will my mortgage automatically renew:

If you do not negotiate your mortgage renewal, it will be automatically renewed but you might not get the best interest rate possible.

Mortgage renewal vs refinance:

The difference between mortgage renewal and refinancing is as follows: a renewal is when your mortgage terms are coming to an end and you need to renew your mortgage for a new term vs refinancing is renegotiating your mortgage before your term is up.

Can you pay off your mortgage at renewal:

Your lender (bank or credit union) will usually limit you to make a lump-sum payment of 10% to 20% of the original principal amount every year. That being said when the mortgage comes up for renewal, you’re usually allowed to make a special payment that’s as large as you want.

When can i renew my mortgage:

You may qualify to renew your mortgage as early as 150 days before maturity. If you respect that time frame, lenders will often waive any prepayment charges or other fees, depending on the mortgage type and other incentives. Thirty days before renewal, is almost a bit too late and you should hurry up to renew your mortgage.

How early can i renew my mortgage:

You may qualify to renew your mortgage as early as 150 days before maturity. If you respect that time frame, lenders will often waive any prepayment charges or other fees, depending on the mortgage type and other incentives. Thirty days before renewal, is almost a bit too late and you should hurry up to renew your mortgage.