A licensed intermediary who shops your mortgage across multiple lenders — unlike a bank specialist who only offers their employer’s products. Lenders pay the broker a finder’s fee (typically 0.5%–1.2%), so there’s no direct cost to you on standard deals.
Provincially — FSRA (Ontario), BCFSA (BC), RECA (Alberta), AMF (Quebec), and similar bodies elsewhere. A broker licensed in one province cannot arrange mortgages in another without separate registration.
Ask how many lenders they’ve funded deals with in the past year, what share of their volume goes to their top one or two lenders, and how they’re compensated on your file type. A broker who won’t answer the concentration question is a red flag.
Refusing to share their licence number, demanding upfront fees before any application, pressuring you to misstate income or occupancy, or only showing you one lender’s offer.
You must qualify at the higher of your contract rate plus 2%, or 5.25%. This applies to all federally regulated lenders. Exceptions: straight renewals with your existing lender, and lender switches at renewal (since November 2024) where the balance and amortization don’t change. Credit unions aren’t bound by this rule and may qualify you more easily.
GDS = (mortgage payment + property tax + heat + 50% of condo fees) ÷ gross income, capped near 39%. TDS adds all other debts to that numerator, capped near 44%. B-lenders may allow TDS up to 50% with a rate premium.
Most prime lenders require at least 680. Equifax and TransUnion scores for the same person can differ by 20–40 points — brokers typically pull Equifax, but lenders may pull TransUnion independently.
No — credit bureaus bundle mortgage-related inquiries within a ~14–45 day window into a single scoring impact. The real risk is duplicate file confusion if multiple brokers submit to the same lender.
Keep credit card balances below 30% of each limit, maintain on-time payments for 6–12 months, and avoid any new credit applications in the 6 months before your mortgage application. Errors on your credit report can be disputed and resolved in 30–45 days.
Because the insurer absorbs the default risk, lenders face less capital exposure and often pass that saving through as a modest rate discount — making a smaller down payment occasionally the lower total-cost path over a short horizon.
Any deposit inconsistent with your documented income will trigger a source-of-funds inquiry. You’ll need to provide a paper trail — sale agreement, gift letter, inheritance disclosure — establishing where the money came from. Undocumented deposits can delay or derail approval.
If rates rise enough that your fixed payment no longer covers the interest owing, the lender triggers a payment increase or the loan negatively amortizes — silently extending your payoff date. OSFI flagged this as a systemic concern during the 2022–2023 rate cycle.
Most variable products allow penalty-free conversion at any time, but the rate offered is typically the lender’s posted (non-discounted) rate for the remaining term — not their best promotional rate.
On a $500,000 mortgage, extending to 30 years can add $50,000–$80,000+ in total interest over the life of the loan, depending on the rate environment.
A standard charge registers for the amount borrowed and can be transferred to a new lender at renewal at low cost. A collateral charge registers for up to 100–125% of property value (useful for HELOCs), but generally cannot be transferred — switching lenders requires a full discharge and re-registration, costing several hundred to over a thousand dollars.
Because the cost only appears when you try to leave. A collateral-charge borrower shopping for a better rate may find that legal fees wipe out the savings — a fact brokers should disclose upfront.
The lawyer searches title, registers the mortgage, holds and disburses funds in trust, and certifies all conditions are met before the lender releases funds. This is a legally required function — no closing happens without it.
A one-time premium policy covering losses from fraud, forgery, undisclosed liens, and certain boundary issues not caught in a standard title search. It complements — it does not replace — the lawyer’s title search.
The lender funds only against the lower appraised value. You’ll need to cover the gap with more cash, renegotiate the price, or walk away under a financing condition.
A condo corporation’s mandatory disclosure document covering reserve fund balance, pending litigation, special assessments, and insurance. Red flags include an underfunded reserve, structural litigation, or any pending special assessment — any of these can cause a lender to decline financing regardless of your personal qualifications.
Very limited. Most A-lenders decline or require 35–50%+ down on raw or unserviced land. Financing typically comes from credit unions with rural mandates or private lenders. Properties on well-and-septic systems face additional restrictions at many insurers.
Sole proprietors: two years of T1 returns with T2125 and Notices of Assessment. Incorporated borrowers also need T2 corporate returns, business financials, and often an accountant’s letter — since a minimal personal salary/dividend draw may not reflect the business’s true income.
Legitimate tax deductions lower your taxable income — the number lenders default to. Solutions include lender add-back provisions for non-cash expenses like CCA, gross-up programs, or dedicated self-employed programs offered by CMHC, Sagen, and Canada Guaranty.
Conservatively. A rising income is averaged over two years; a declining income is qualified at the lower, more recent figure. One strong outlier year followed by a weaker year can significantly reduce your qualifying amount.
A program that substitutes a reasonableness assessment for full documentary income verification. In exchange, lenders typically require 35%+ down, a minimum two-year self-employment history, and charge a rate premium. It’s a risk-transfer mechanism, not an income-verification waiver.
A-lenders (banks, monolines) have the strictest criteria and lowest rates. B-lenders allow more flexibility — higher TDS, alternative income docs — at a rate premium. Private lenders lend almost entirely based on property equity and exit strategy, at the highest cost, typically on 12-month terms.
A pooled investment vehicle that funds mortgages using investor capital rather than deposits. Because it’s not subject to OSFI guidelines, it can finance construction, bridge deals, and credit-impaired files that banks won’t touch.
A credible, documented plan to repay or refinance within the loan term — improving credit, selling the property, or transitioning to a conventional lender. Private lenders underwrite the exit as carefully as the collateral, since their model assumes short holding periods, not long-term amortization.
Renewal: same lender, same balance at maturity — minimal underwriting. Switch: new lender at maturity, same balance and amortization — streamlined underwriting, no stress test (post-Nov 2024). Refinance: mid-term, full underwriting, new appraisal, legal fees, and a prepayment penalty.
An Interest Rate Differential penalty is based on the gap between your contract rate and the lender’s current posted rate for your remaining term, applied to your balance over that period. When rates have dropped significantly since you signed, that gap — and the penalty — can reach tens of thousands of dollars.
Because variable rates already float with the lender’s cost of funds, there’s no rate differential to compensate for. The penalty is a flat three months’ interest — predictable and typically modest.
Most mortgages allow penalty-free lump-sum prepayments (typically 10–20% of original principal) plus payment increases (up to 100% of the original payment) per year. Unused privileges don’t carry forward to the following year, so timing matters if you’re expecting a windfall.
If you occupy one unit of a 2–4 unit property, insured financing (as low as 5–10% down) may apply. A pure rental with no owner-occupied unit requires a minimum 20% down — insurers do not cover pure rental acquisitions.
Two main methods: adding a percentage (50–80%) of rental income to your qualifying income, or netting rental income directly against the property’s carrying costs. The two methods can produce very different results — lender selection matters.
Yes. Many lenders apply portfolio caps and more conservative rental income treatment as portfolio size grows. Investors with four or more financed properties typically need a broker who specifically tracks which lenders’ policies remain favourable at that portfolio size.
No. A separation agreement has no effect on lender liability. The only way to release a departing spouse is through a formal refinance or lender-approved assumption — until then, both parties remain fully liable regardless of what the agreement says.
Yes. CMHC, Sagen, and Canada Guaranty all allow insured financing up to 95% LTV for spousal buyouts, even for non-first-time buyers — recognizing that a buyout is closer to a refinance of an existing interest than a new purchase.
The underlying legal instrument must be reviewed by counsel before any mortgage can be registered. This materially extends closing timelines and should be flagged to all parties — broker, lawyer, lender — as early as possible.
A lateral or upward move within the same industry, with a signed offer letter confirming base salary, is generally treated favourably. A switch to a new industry, a move from salaried to self-employed, or multiple recent job changes introduces income instability that more conservative lenders may decline outright.
Major banks offer programs that waive or reduce the standard Canadian credit history requirement — accepting employment letters and international credit references — typically at a minimum 10% down rather than the standard 5%.
Federal legislation enacted in 2023 (and since extended) generally prohibits non-residents, non-citizens, and non-permanent residents from purchasing residential property, with specific exceptions. The rules have shifted since enactment — always verify the current scope before proceeding.
Generally not independently. The standard solution is a joint application with a Canadian-resident co-borrower — typically a parent or family member — whose income and credit support the file.
A HELOC is a revolving line of credit (up to 65% LTV standalone, 80% combined), interest-only by default, with no required principal repayment. A second mortgage is a fixed-term, amortizing loan in second position — used when refinancing the first mortgage isn’t economical due to a large prepayment penalty.
A strategy that converts non-deductible mortgage interest into tax-deductible investment loan interest by re-borrowing paid-down principal through a readvanceable HELOC and investing in income-producing assets. The CRA’s deductibility test requires a clean, traceable link between borrowed funds and investments — this should only be executed with professional tax advice.
A single mortgage covering the purchase price plus a defined renovation budget, with the improvement portion held back and released upon verified completion — rather than advanced in full at closing.
Available to homeowners typically 55+, it advances funds against your equity with no required ongoing payments. Interest compounds and accrues until the home is sold, you pass away, or a defined triggering event occurs. It’s the only Canadian mortgage product designed around negative amortization by intent.
It’s asset-income driven, not borrower-income driven. The key metric is the property’s debt service coverage ratio (net operating income ÷ total debt service, typically required at 1.20–1.35x or higher). The borrower’s personal income is a secondary consideration.
Generally 25–35%, varying by asset class. Multi-family (5+ units) may qualify for more favourable terms through CMHC programs. Retail, hospitality, and specialized industrial assets typically require higher down payments.
Yes — via a commercial refinance or registered second mortgage against owned real estate. This converts illiquid equity into deployable capital, distinct from inventory financing or accounts-receivable factoring, which are secured against business assets rather than real property.
An MCA is repaid as a daily percentage of revenue with no fixed maturity — it solves a working capital problem. A mortgage is repaid on a fixed schedule — it finances a capital asset. Their effective costs aren’t comparable; an MCA’s annualized rate is often many multiples of secured real estate debt.
Default insurance (CMHC/Sagen/Canada Guaranty) protects the lender if you default — you pay the premium, the lender gets the benefit. Mortgage life/disability insurance protects your family or income if you die or become disabled. They cover completely different risks and neither is a substitute for the other.
Generally, an independent term life policy is more advantageous. Lender policies are often assessed for eligibility only at time of claim (not at issuance), non-portable if you switch lenders, and pay the lender directly. An independent policy is pre-underwritten, portable, and pays a named beneficiary who decides how the funds are used.
For variable-rate and HELOC borrowers: within days — lender prime rates adjust almost immediately. For fixed-rate borrowers: the effect is indirect and often already priced in, since fixed rates track bond yields, which move on market expectations well before any Bank of Canada announcement.
No reliable model consistently predicts short-term rate movements. The dominant strategy is to lock a rate hold immediately — it’s free — and monitor for improvement. Most lenders allow you to take a lower rate if one becomes available before closing, so there’s little downside to locking early.