It makes good sense to get pre-qualified for a mortgage before you even start looking at homes, because then you will know what you can afford, and won't waste time and energy spreading your home search all over the map. Also, if you're pre-approved for a mortgage loan already, you will be able to quickly put your financing in place when we do find that perfect property for you.
When you are pre-qualified, it just means that the lender has reviewed the financial information from your initial application and has determined the maximum loan you can afford (this figure can change in the future if you submit new documentation, such as proof of a pay raise, for example). Once all your financial information (assets, debts, income, etc.) has been verified, you will then receive a certificate from the mortgage broker outlining the different mortgage terms, rates, options and amount(s) they are willing to offer you.
Because Calgary Real Estate™ has in-house mortgage brokers who can access a wide range of different lenders and mortgage products, we can quickly determine whether you're a good candidate for a loan, and if so, which products are best for your overall financial picture. Your financial consultation and quotes are always completely free and come with no obligation!
For a quick estimate of what you can afford, try our Financial Calculators on our website.
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Types of Mortgages
There are many different types of mortgages available. Below are some basics; together we will find the right product for you.
Conventional vs. High Ratio Mortgages
Conventional mortgage = a mortgage that does not exceed 80% of the property's price. With a conventional mortgage, you don't have to have mortgage insurance. The other 20% of the purchase price comes from you in some way.
High Ratio mortgage: If you don't have 20% of the purchase price of the property, your mortgage must be insured against payment default by a recognized Canadian mortgage insurer; the largest and most well-known are the CMHC and Genworth. You'll have to pay a premium for this insurance; the amount depends on how much you are borrowing and how much of a down payment you do have.
Fixed vs. Variable Interest Rate Mortgages
Fixed Rate Mortgage = the interest rate will not change throughout the entire term of your mortgage, so you'll always know exactly how much your monthly payments will be
Variable Rate Mortgage = the interest rate may fluctuate from time to time because it changes when the lender's prime rate changes. If the interest rate goes down, more of your payment will go towards the principal, helping you pay off your mortgage faster; if the interest rate goes up, more of your payment will go towards interest, and it could take longer to pay off your outstanding balance
Term = the length of your mortgage agreement with the bank.
- Terms can range from 6 months to 10 years
- When a term expires, the balance you still owe on your mortgage can be repaid, or you can renew the mortgage term
- 'Short' terms are usually 2 years or less and usually have a lower interest rate
- 'Long' terms are usually 3 years or more and make sense to lock in when interest rates are low
Open vs. Closed Mortgages
Open mortgages = ones that allow you to pay any amount toward your mortgage at any time, without having to pay any premiums for doing so. You can make large lump sum payments that help you save on interest in the long term, if you're able and willing to do so.
Closed mortgages = ones that require you to make set payments at set times and pay a penalty of some sort if you want to pay more, renegotiate or refinance your mortgage before the term is up. These often have lower interest rates than open mortgages.
You might hear mortgage brokers or bankers talking about 'amo' a lot. They're not referring to ammunition, but rather the amortization period, which is simply the length of time, measured in years, that it will take you to pay off your mortgage completely, assuming the interest rate stays the same for the whole period of time. Choosing the amortization period that's right for you is important, because obviously the longer you are paying something off for, the more interest you'll wind up paying for the privilege. Some quick facts about amos:
- The standard amortization period is usually 25 years, but shorter and longer time frames are also available. It's critical to know that mortgage rules are always changing and long amortizations that might be common in other countries (such as 50-year amos that offer the advantage of very low monthly payments) are strictly regulated in Canada.
- No matter what length of amortization you choose, there are different mortgage options that allow you to pay off your mortgage faster if you wish. For example, you can pay weekly or bi-weekly instead of monthly.
Whether you choose a convertible mortgage, a cash-back mortgage, a high ratio mortgage, or any combination of the mortgage types we've listed above…a Calgary Real Estate™ mortgage specialist would be happy to assess your unique situation and provide you with a range of options that will help you meet your homeownership and equity goals sooner.
Download the Rebate Form.
What's eligible for the rebate?
- ENERGY STAR® qualified major appliances, heating, cooling and ventilation equipment and controls, windows, doors and skylights
- CSA approved Solar Panels
- The cost of a residential energy efficiency assessment
To find out whether a specific product is ENERGY STAR® qualified, or for a list of assessment organizations, visit the Natural Resources Canada website or call 1-800-O-Canada (1-800-622-6232).
To find out if a specific Solar Panel product is CSA approved, refer to the following website: CSA International - Certified Product Listing or call 1-866-797-4272.
For new Green Mortgages or Green HELOCs, the rebate is based on the principal amount of the Green Mortgage or the fixed rate portion of the Green HELOC. For renewals taking advantage of this offer, the rebate is based on the outstanding balance renewed. ENERGY STAR qualified purchases or CSA approved solar panel purchases must be made within six months after the term start date of the financing and receipts must be submitted to TD Canada Trust within the same period. For CSA approved solar panel rebate requests, along with your purchase receipt, please include the Specification Modular Sheet noting the model and class information for the solar panels. The CSA standard for solar panels in Canada is ULC/ ORD-C1703.
Please note: if you receive an interest rate discount greater than 1% off the posted five-year fixed rate, you are not eligible for the benefits of a Green Mortgage or Green HELOC. Only one rebate is allowed per household per property address every five years, regardless of whether you had a Green Mortgage or Green HELOC. Rebate may cover taxes on product purchases, but will not cover installation costs. Green Mortgage or Green HELOC is not available with any other offer or with other cashback mortgages.
No tax receipt will be issued as this is a donation by TD Canada Trust.
Don't forget: apart from the mortgage, there are additional costs involved in buying a home. Try to have at least 5% of the home's sale price set aside (excluding the deposit you'll make when you put in your offer!) to cover these costs, so you won't be facing any surprises.