The Canadian mortgage guide

1. Pre-approval comes first

Before you shop, get pre-approved. It tells you your maximum price, gives you a rate hold (often up to 120 days), and signals to sellers that you're serious. Our initial check is a soft inquiry that doesn't affect your credit score.

2. Know your down payment

In Canada, the minimum down payment is 5% on the first $500,000 of the price, 10% on the portion between $500,000 and $1,500,000, and 20% on homes priced at $1,500,000 or more. With less than 20% down, you'll pay default insurance (CMHC, Sagen, or Canada Guaranty).

3. Fixed vs variable, term vs amortization

A fixed rate stays the same for your term; a variable rate moves with the lender's prime rate. Your term (often 5 years) is how long your current contract lasts, while your amortization (up to 25–30 years) is the total time to pay the mortgage off. At the end of each term you renew or switch lenders.

4. The stress test

Federally regulated lenders must qualify you at the greater of your contract rate plus 2% or the benchmark qualifying rate. It confirms you could still afford payments if rates rise. We test you up front so approvals don't fall through later.

5. Closing costs

Beyond your down payment, budget roughly 1.5%–4% of the price for land transfer tax (which varies by province, with an extra municipal tax in Toronto), legal fees, title insurance, and adjustments. First-time buyers may qualify for land-transfer-tax rebates.

6. Renewal - your chance to save

When your term ends, don't simply accept the first renewal offer. You can renew on better terms or switch lenders penalty-free. Start shopping about 120 days before your maturity date.

This guide is educational and illustrative only - not financial or legal advice. Program rules and rates change; confirm current details with the relevant authority and a licensed professional.