Learn the mortgage game
The mortgage industry runs on jargon and rate leaderboards. Here's the plain-language version of what actually determines cost, fit, and whether you qualify: the stuff nobody volunteers. Read what you need; ignore the rest.
Cost
The costs that dwarf a few basis points on the rate.
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Prepayment penalties & the IRD
Breaking a closed mortgage before the term ends triggers a penalty, and on a fixed-rate loan that penalty can run into the tens of thousands because of how the Interest Rate Differential is calculated.
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How the Big Six keep you (and charge you)
Canada’s six big banks dominate residential mortgages, and several standard features of their contracts quietly make it costly to leave once you’re in.
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Prepayment privileges
Almost every Canadian mortgage lets you pay down a chunk of your principal early each year with no penalty, and most people never use it.
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Qualifying
What determines whether you qualify, and at what rate.
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GDS & TDS (debt-service ratios)
GDS and TDS are the two ratios lenders use to check how much of your income already goes to housing and total debt before they'll approve a mortgage.
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The mortgage stress test
The stress test forces you to prove you could still afford your mortgage at a rate roughly two percentage points above the one you're actually signing for.
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Insured vs insurable vs uninsured
Whether your mortgage is insured, insurable, or uninsured comes down to your down payment and home price, and it quietly decides both your rate and whether you pay an insurance premium.
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Down payment: tiers & sources
How much cash you need up front depends on the price of the home, and where that cash comes from is a rule of its own.
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Mortgage default insurers (CMHC, Sagen, Canada Guaranty)
Canada has three mortgage default insurers, and the policy they issue protects your lender if you stop paying, not you, even though you're the one who foots the bill.
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Self-employed & non-traditional income
If your income doesn't arrive as a steady paycheque from one employer, lenders make you prove it harder, but there are clear programs built for exactly that situation.
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Credit score & history
Your credit score decides which lenders will even look at your file and what rate they'll offer, sorting borrowers into banks, alternative lenders, and private lenders.
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Product
The features and flexibility hidden behind the headline number.
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Fixed vs variable rate
A fixed rate locks your payment for the whole term; a variable rate moves with your lender's rate, but the quieter, bigger difference is what it costs to break the mortgage early.
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Adjustable vs true variable (& trigger rate)
A "variable-rate" mortgage in Canada comes in two flavours that behave very differently when rates move: one changes your payment, the other quietly changes how much of your payment goes to principal until it can't anymore.
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Open vs closed mortgages
An open mortgage lets you pay it off anytime with no penalty but costs a higher rate; a closed mortgage is cheaper but penalizes you for paying it off early.
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Portability & blend-and-extend
If you're moving, porting lets you carry your existing mortgage and its rate to the new home instead of breaking the contract and paying a penalty, and blend-and-extend lets you fold in extra borrowing at today's rate without that penalty either.
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Assumability
Assumability is a mortgage feature that lets a future buyer take over your existing loan at its original rate and terms, which becomes valuable when market rates climb above the rate you locked in.
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Payment frequency & accelerated payments
How often you make mortgage payments barely changes your interest, but switching to "accelerated" quietly adds one extra monthly payment a year and can shave years off your loan.
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Amortization (25 vs 30 years)
Stretching your mortgage over 30 years instead of 25 lowers each payment but raises the total interest you pay, and who can get 30 years depends on your down payment and buyer status.
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Collateral vs standard charge
A standard charge registers your mortgage for exactly what you borrowed and can be handed off to a new lender at renewal, while a collateral charge registers a larger re-usable claim on your home that a new lender generally won't accept, so switching means discharging and re-registering.
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HELOCs & readvanceable mortgages
A HELOC lets you borrow against your home's equity on a revolving basis, and a readvanceable mortgage bolts one onto your regular mortgage so the credit limit grows automatically as you pay the mortgage down.
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Rate holds
A rate hold locks in a quoted mortgage rate for a set window (commonly 90 to 120 days) so a rise in market rates before you close can't touch your deal.
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Lenders
Who actually lends in Canada, and how you reach them.
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Lender types (banks, monolines, credit unions, B-lenders, private, MICs)
Canadian mortgages come from six lender types that trade off price, accessibility, and how forgiving they are about your income and credit, from cheap-but-broker-only monolines to expensive-but-flexible private lenders.
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Broker-exclusive vs direct-to-consumer
Some of the sharpest mortgage deals in Canada never appear at a bank branch because those lenders only fund loans arranged through mortgage brokers.
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How brokers get paid (and where it can bite)
A mortgage broker is usually paid by the lender they place you with, and how much they earn can quietly shape which lender they put in front of you.
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Strategy
Playing the long game: renewals, refinances, and rate strategy.
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Renewal shopping
The renewal letter your lender mails you is almost never their best rate, and switching lenders at renewal is easier than most people assume.
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Refinancing cost-benefit
Breaking your mortgage early to chase a lower rate only pays off if the interest you save clearly beats the penalty your lender charges to let you out.
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Ready to put it to work?
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