Frequently Asked Questions

Chances are, you're not the first person to ask.
Take a look at answers to some of our more frequently asked questions.

What is a home inspection and should I have one done?

A home inspection is a visual examination of the property to determine the overall condition of the home. In the process, the inspector should be checking all major components (roofs, ceilings, walls, floors, foundations, crawl spaces, attics, retaining walls, etc.) and systems (electrical, heating, plumbing, drainage, exterior weather proofing, etc.). The resultsof the inspection should be provided to the purchaser in written form, in detail, generally within 24 hours of the inspection.

What is the minimum down payment needed for a home?

A minimum down payment of 5% is required to purchase a home, subject to certain maximum price restrictions. In addition to the down payment, you must also be able to show that you can cover the applicable closing costs (i.e. legal fees and disbursements, appraisal fees and a survey certificate, where applicable). Mortgages with less than 20% down must have mortgage loan insurance provided by either CMHC or GE.

Where can I get my Notice of Assessment (NOA)?

Either from your accountant or at

What is a T4?

For many Canadians, the T4 is the key piece of paper they need for their taxes. Officially known as T4 Statement of Remuneration Paid, the slip provides most of the important information you need to complete your return. You are required to report all your T4s in the year you earned the income.

What are pre-payment options?

These allow you to more aggressively pay down your mortgage. You can increase your monthly payments, which allows you to pay more on your mortgage each month or you can pay as a lump sum, meaning put an additional sum of money toward the mortgage principal

What is a conventional mortgage?

A conventional mortgage is usually one where the down payment is equal to 20% or more of the purchase price, a loan to value of or less than 80%, and does not normally require mortgage loan insurance.

What is a collateral mortgage?

Most Canadian lenders offer collateral mortgages, which allow you to borrow money from your home throughout the mortgage term. You don’t have to refinance your mortgage to take advantage of this, and there are no legal fees. You just have to maintain at least 20% equity in your home to borrow up to 80% of its value. Collateral mortgages can’t be transferred from one lender to the next, even at the end of your term. If you did want to switch lenders, you’d need to hire a real estate lawyer to get out of your contract. Therefore, be sure you ask about collateral mortgages; if you might switch lenders in a few years, this isn’t for you.

Is mortgage insurance required?

There is no GST unless the house has been renovated substantially, and then the tax is applied as if it were a new house.

Can I use gift funds as a down payment?

Yes, most lenders will accept down payment funds that are a gift from family as an acceptable down payment. A gift letter signed by the donor is usually required to confirm that the funds are a true gift and not a loan

What is a pre-approved mortgage?

A pre-approved mortgage provides an interest rate guarantee from a lender for a specified period of time (usually up to 120 days) and for a maximum amount of mortgage financing. Most real estate professionals will want to ensure you have a pre-approved mortgage in place before they take you out looking for a home. This is to ensure that they are showing you property within your affordable price range.

Can I take my mortgage with me when I move?

Yes. Subject to credit approval, when you move from one home to another in Canada, you may be able to take your existing mortgage balance with you, at the same interest rate, for the remaining term. Alternatively, you may be able to combine your existing mortgage balance with additional financing at a blended rate to finance a new home (applicable to fixed rate mortgages only). No interest penalty is charged.

How can you acquire a home with as little as 5% down?

Most lenders now offer insured mortgages for both new and resale homes with lower down payment requirements than conventional mortgages - as low as 5%. Low down payment mortgages must be insured by CMHC or Genworth to cover potential default of payment.

What is the difference between an “open” and “closed” mortgage term?

A closed mortgage has a restriction on the amount that you can prepay on your mortgage. If you pay off your mortgage balance or pay too much during the term, you could incur penalties. An open mortgage can be repaid at any time without penalties.

Is GST paid on a resale home?

There is no GST unless the house has been renovated substantially, and then the tax is applied as if it were a new house.

Can we make changes to the mortgage application once the application has been submitted?

Yes. Your ideal mortgage formula has probably already been created, but if you want to consider a change let’s review the possible benefits and implications.

What is a guarantor?

A person who promises the lender she or he will repay a debt if the principal debtor defaults. A guarantor will be requested if the clients who apply for a mortgage are unable to obtain financing by themselves. Circumstances where this could happen would include: insufficient employment history, poor history of debt repayment or un-confirmable income.

What is the difference between a “variable” and “fixed” mortgage?

A variable mortgage is based on the prime rate set by the Bank of Canada. When prime rate increases, so does your variable interest rate. When the prime rate decreases, your variable follows! A lot of people have benefited from getting a variable mortgage, but you have to understand that it is a gamble. You do not want to get caught when the prime rates rise! A fixed mortgage is the opposite. You will lock in for a set amount of time (5 years for example) and your interest rate will not change for that period.

What are the benefits of bi-weekly payments?

Bi-weekly payments have a number of benefits, but the largest is that over the space of a year you wind up making one additional payment. It might not seem like a lot, but over the term of your mortgage, it can save thousands of dollars.

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