Mortgage FAQ
Straight answers to the questions I hear most often. If yours isn't here, just reach out. I'm happy to talk it through.
What's the difference between a mortgage broker and a bank?
A bank can only sell you their own products. I'm independent, so I work with a wide range of lenders, major banks, credit unions, monoline lenders, and alternative lenders, and I compare across all of them to find what actually fits you. Not just whatever the person at the branch happens to be offering that day.
Does it cost anything to work with a mortgage broker?
Usually not. The lender pays me once your mortgage funds, so in most cases there's no cost to you for the advice or the work of comparing lenders.
How much down payment do I actually need?
5% on homes up to $500,000. 10% on the portion between $500,000 and $1.5 million. 20% on anything $1.5 million or more. Once you're putting down 20% or more, you're in conventional territory and don't need default insurance.
What credit score do I need to qualify for a mortgage?
Most A lenders want to see at least 680 from one borrower or guarantor, especially if you're putting down less than 20%. With 20% or more down, 680 isn't required, but it still makes your file look better. And if your credit's lower than that, there are still B lenders and alternative options.
What's the difference between pre-qualification and pre-approval?
Pre-qualification is a rough guess based on numbers you tell me. Pre-approval means I've actually verified your income, credit, and documents, so it's a real number you can shop with. Just know that even a pre-approval isn't a guarantee. The final approval still comes down to the property and full underwriting once you have an accepted offer.
Should I choose a fixed or variable rate mortgage?
It comes down to you. A fixed rate locks your payment for the whole term, so it never moves. A variable rate follows the Bank of Canada's prime rate, so your payment (or how much goes to principal) can go up or down along the way. There's no right answer for everyone. It's about what actually lets you sleep at night.
What happens when my mortgage comes up for renewal?
Your lender sends you a renewal offer a few months before your term ends, and it's almost never their best rate. I review renewal offers for clients all the time, so it's worth comparing the market before you just sign whatever lands in your inbox.
Can I get a mortgage if I'm self-employed?
Yes. There are a few ways to qualify: using bank statement income (usually 6-12 months of statements) or averaging your income across your last two years of tax returns. It's more paperwork than a typical salaried file, but it's absolutely doable with the right lender.
What is mortgage default insurance and do I need it?
You need it any time you put down less than 20%. It's through CMHC, Sagen, or Canada Guaranty, and it protects the lender, not you, if you default. But it's also the reason lenders can offer you a mortgage with a smaller down payment in the first place, often at rates comparable to bigger down payments.
What's a bond yield and why does it affect my mortgage rate?
Fixed mortgage rates track the bond market, not the Bank of Canada's overnight rate. When Government of Canada bond yields go up, fixed rates tend to follow. When yields drop, fixed rates usually come down too. Variable rates are different. Those move with the Bank of Canada's prime rate instead.
Can I use gifted funds for my down payment?
Yes. Most lenders accept a gifted down payment, usually from an immediate family member, along with a signed gift letter confirming it's a genuine gift and not a loan you'll be paying back. There are a few restrictions depending on the lender, so it's worth confirming for your specific situation.
What documents will I need to apply for a mortgage?
Government-issued photo ID, proof of income (job letter and pay stubs, or tax documents if you're self-employed), proof of your down payment (bank statements showing the funds and where they came from), and details on the property. My Document Guide walks through exactly what's needed for different situations.