Canada is known to have an abundance of picturesque areas, and other beauties carved out by nature. With it being a progressive and multicultural country, many people are aspiring to visit and/or move to this country. Of course, when you want to create a piece of heaven in the place where you landed, there are things to be considered, especially when it comes to housing. Moving to a new house can be costly. How much more if you are relocating from overseas or buying one in the city?

We cannot deny that living in the city has its advantages, such as it may be closer to your place of work and more job opportunities. Plus, the proximity of goods, technology, and services that you can avail of is much more desirable than living in the countryside. In this article, we will be looking into the things you need when you plan to buy your own house in Canada, especially when it comes to mortgages.

If you belong to an average working class, taking out a mortgage is the only way for you to own a house when you are in a large city like Ottawa or Toronto, which are both located in Ontario.

The first step that you have to undergo is to look for a house, or if you already have a house in mind, all you have to do is to prepare the pre-approval papers necessary when taking out a mortgage.

Getting pre-approved is important because that is how lenders can gauge whether you can fulfill and complete the terms and conditions of your mortgage agreement. You can see this page for more info on mortgage pre-approval, forms, and similar topics.

Mortgage Down Payment


The minimum amount of down payment that you need to pay is largely dependent on the purchase price of the house you have chosen. This is then deducted from the full price of the house by the lender. In Canada, if you pay less than 20% for your down payment, you have to purchase mortgage loan insurance, which will protect the mortgage lender if you cannot meet your mortgage payments because the minimum down payment must directly come from your funds. This is to help you minimize your debts.

Mortgage amortizations and Terms


Mortgage amortization is the period or the length of time it will take to pay off your mortgage in full. In cases stated earlier, if you only paid for less than 20% of your down payment, the maximum amortization they can give you is 25 years. As for mortgage terms, this determines the time of when your mortgage contract is in effect, and it can take a few months up to a few years so, by the end of each term, you have to renew your mortgage. The only time that you do not need to renew your mortgage after each term is when you pay your mortgage balance. Interest rate and contract outlines are also included in your mortgage term.
There are kinds of mortgage terms which are:

Short-term mortgage

  • This lasts for a few months up to 5 years.
  • Lower interest rate
  • You can choose for a variable or a fixed interest rate

Long-term mortgage

  • Longer than five years
  • You may lock in interest for a longer time
  • Pre-payment penalty awaits you if you sell your house within the first five years of the term

Convertible term mortgage

  • Some short-term mortgages can be converted to long-term mortgages but with the conversion of the term also comes the change in interest rate.

Mortgage Deferral


This is an important thing that you should note. This is the agreement between your financial institution and you that allows you to delay your payment for a determined period. This is very beneficial for those who are suddenly faced with a financial crisis. However, after the deferral period, you have to repay the mortgage payment that you have deferred and your financial institution will choose how you are going to repay your deferred payments. This may include the following:

  • Your financial institution can increase your regular payment after the deferral period.
  • They can add deferred payments to your balance at the end of its term. The added payment is in the form of interest, which your financial institution has added during the deferral period.
  • Or they can extend the mortgage amortization period as they see fit.

Breaking mortgage contract


This is quite a common undertaking. People often negotiate to break their contract with the lender when circumstances such as the following happen: buying a new home, changes in family situations occur, interest rates go down, or financial situation changes. Always remember that not all mortgage contracts can be dissolved, so it is better to talk about it first with your lender.

There are also costs to breaking your mortgage contract that you should be aware of. A prepayment penalty is at the top of the list, which you normally have to deal with when you break the contract.

Other fees may include appraisal fees, reinvestment fees, administration fees, and mortgage discharge fees to remove your current mortgage charge before you register into a new one. Find mortgages at

How to pay your mortgage faster


Saving is a priority, especially when you just took out a mortgage. There are times when unforeseen spending may happen, but here are some tips on how you can pay your mortgage off faster.

Reverse mortgages are becoming increasingly popular to defer monthly payments for older homeowners. This is because a reverse mortgage allows homeowners who are 62 years or older to convert a portion of the equity in their home into cash, which can be used to supplement retirement income or to cover unexpected expenses. By eliminating the need to make monthly mortgage payments, a reverse mortgage can provide financial relief and peace of mind for older homeowners. Websites like AARP,, and the Department of Housing and Urban Development (HUD) are great places to learn more about reverse mortgages and how they work.

  • Choose an accelerated payment option that lets you pay weekly or biweekly. This option helps you from having to spend your savings if compared to the monthly payment method.
  • Keep your payment the same even when you change your mortgage. There are some instances where you may be able to get lower interest when you renew your mortgage, which will allow you to reduce the amount of your payment but keeping your regular payment can pay it off much faster.
  • Increase your payment, but make sure it is within the certain amount allowed in your mortgage contract. This is also true with a lump-sum payment. Any excess in payment may incur additional fees.

Finally, having a house that you can call your own anywhere else in the world must be ecstatic, and a dream come true. Just remember that when it comes to handling financial matters in regard to the topic of mortgages, be smart in making choices. It will save you big time.