Home Purchase Mortgages · BC & Alberta · Since 2012
Buy the house. Not the first mortgage you were offered.
Most buyers spend months choosing a property and about twenty minutes choosing the financing behind it, even though the mortgage is the part they live with for the next twenty-five years. This is what actually goes into that decision.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
Qualification
What a lender is actually deciding.
Underwriting is less mysterious than it looks. A lender is answering three questions: can you carry this debt, have you handled credit responsibly before, and if everything went wrong, what is the property worth? Everything on the document list serves one of those three.
Where lenders differ, and they differ enormously, is how they read the inputs. Two lenders looking at the same borrower will count bonus income differently, treat a car lease differently, and take opposite views of a small condo or an acreage. That is why the same person gets different answers at different institutions and concludes the system is arbitrary.
One rule applies everywhere and cannot be worked around: every borrower in Canada is qualified at a rate higher than the one they will pay. Nobody removes that. What a broker does is find the lender whose calculation gives your file the most room inside it.
- How your income is documented, which often matters more than the amount
- Credit history, and which blemishes are workable and which are not
- Existing obligations: car payments, lines of credit, student debt, support payments
- Down payment size, and which side of the insured threshold it puts you on
- The property itself, which can sink an otherwise strong application
General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
Insured vs uninsured
The down payment decides which market you are shopping in.
This is the structural fork on a purchase and almost nobody explains it. Below a certain down payment your mortgage is insured, which means a default insurer is involved, a premium is added to the balance, and a different set of lender programs applies. Above it, the mortgage is uninsured and a different set applies. Neither is automatically better. They are different products with different trade-offs, and the thresholds are set federally and do change.
Insured financing, in general terms
A default insurance premium is added to the mortgage, and in BC there is provincial sales tax on that premium payable at closing
Amortization options are more limited
Property type and price ceilings apply
Rates on insured mortgages are often lower, because the lender carries less risk
The file is underwritten to both the lender’s and the insurer’s rules
Uninsured financing, in general terms
No insurance premium, so nothing extra added to the balance
More flexibility on amortization, property type and purpose
Rates are frequently higher than the equivalent insured rate
More lender choice on unusual properties and non-standard income
Refinancing later is generally simpler
Thresholds, premium rates, price ceilings and amortization limits are set by the federal government and the insurers, and they change. Confirm current figures for your own purchase before budgeting around any of them. General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
What completion actually costs
The down payment is not the last cheque you write.
Buyers routinely put every available dollar into the down payment and then discover there is a second bill due on completion day. Here is what belongs in that column.
Cost 01
Property transfer tax (BC)
British Columbia charges a transfer tax on most purchases, payable in cash at completion and not financeable, with relief available in some circumstances. Alberta does not levy an equivalent tax and charges Land Titles registration fees instead.
Cost 02
Legal or notary fees and disbursements
Conveyancing, title insurance, registration charges and the lawyer’s or notary’s own fee. Ask for the estimate early rather than the week before.
Cost 03
Inspection and appraisal
A home inspection is your decision and almost always worth it. An appraisal may be required by the lender depending on the file and the property.
Cost 04
Default insurance premium and PST
Where the mortgage is insured, the premium is added to the balance, but in BC the tax on that premium is due in cash at closing.
Cost 05
Adjustments
Property taxes and strata fees the seller has already paid past your completion date get reimbursed to them on closing.
Cost 06
Fire insurance, in place before completion
Your lender will require proof of coverage effective on the completion date. Arrange it well before, not on the day.
Costs, thresholds and exemptions are set by government and lenders and change over time. Your lawyer or notary produces the number that actually applies to you.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
Term and rate type
Fixed or variable is the wrong first question.
People arrive at this decision as though it were a bet on interest rates. It mostly is not. Nobody, including me, knows where rates go, and anybody who tells you otherwise with confidence is guessing in a suit.
The better questions are about you. How long do you realistically expect to hold this mortgage? What would happen to your household if the payment rose meaningfully? Do you expect to sell, refinance or move within the term? A five-year fixed carries a prepayment penalty that can be substantial if you break it early, and the way that penalty is calculated varies enormously by lender. That calculation is worth understanding before you sign, not after.
The mortgage features matter as much as the rate. Prepayment privileges, portability, assumability and how the penalty is computed can be worth more over the term than a small difference in the rate itself. A cheap rate attached to a restrictive contract is not a good deal, it is a good headline.
- How long you actually expect to hold the mortgage
- Your tolerance for a payment that can move
- Prepayment privileges, and whether you will use them
- How the lender calculates a break penalty, which differs wildly
- Portability, if there is any chance you move mid-term
- Whether the lowest advertised rate carries restrictions you would regret
No rate forecast is offered or implied anywhere on this page. General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
Mortgage Tools
Run your own numbers.
Estimates for planning — not approvals, rate offers or advice. When the numbers raise questions, that’s exactly what a twenty-minute conversation is for.
Mortgage Payment
Affordability
BC Residential Property Transfer Tax
Mortgage Calculator
Easy to use Canadian Mortgage Calculator jam-packed with features.
Renewal Calculator
Easy to use Canadian Mortgage Calculator jam-packed with features.
Compare side-by-side
Innovative Scenario Comparison Tool designed for up to 4 scenarios
Purchase Calculator
The ultimate budgeting tool with all the bells and whistles.
Maximum Mortgage Calculator
Calculate the stress tested mortgage amount based on your desired GDS/TDS.
Required Income Calculator
Calculate the required income for any size mortgage.
Debt Service Calculator
Powerful Debt Service Ratio Tool for the Professional user
Land / Property Transfer Tax Calculator
Transfer taxes and rebates for every region in Canada.
Closing Cost Calculator
Never be surprised again with detailed closing costs analysis.
All calculator results are estimates for illustration only. They are not a commitment to lend, a rate offer, a pre-qualification, a pre-approval, or financial advice. Actual qualification depends on a full review of your credit, income, documentation and the policies of individual lenders. Tax rules and insurance premiums are subject to change.
Every calculator, in your pocket.
The Mortgage App — free to download. Payment, affordability, land transfer and closing-cost calculators, connected directly to Dil.
Related
Where people usually go next.
First-Time Home Buyers
Buying your first place? Start there instead. It covers the same ground plus the parts that only apply the first time.
Read more →
Self-Employed Mortgages
If your income comes from a business rather than a paycheque, the qualification conversation is a different one.
Read more →
Mortgage Refinancing
Already own, and looking to restructure or access equity rather than buy.
Read more →
Purchase questions
What buyers ask before they write an offer.
General information for British Columbia and Alberta, not advice on your specific file. Qualification rules, thresholds and program details change.
How much can I afford to buy?
Two different numbers, and it is worth keeping them apart. There is what a lender will approve, which comes out of your income, credit, debts and down payment. And there is what you can comfortably carry alongside the rest of your life. Those are not always the same number, and when they differ I will tell you so. The approval figure is a ceiling, not a target.
Should I get pre-approved before I start looking?
Generally yes, because it tells you the real budget and, with most lenders, holds a rate while you shop. Be clear on what it is though. A pre-approval is a lender reviewing your documents in advance. It is not financing, and final approval still depends on the lender’s full review of your file and of the property you eventually pick. Keep a financing condition in your offer.
Does the property itself affect whether I get approved?
More than most buyers expect. Very small units, some strata buildings with financial or structural issues, rural acreage, properties on well or septic, former grow operations, and anything with an unusual title can all narrow the lender list sharply or close it. If what you are looking at is out of the ordinary, raise it before you write, not during subject removal.
What is the difference between the rate and the mortgage?
The rate is one term in a contract with many. Prepayment privileges, how a break penalty is calculated, whether the mortgage is portable, and whether the lender registers a standard or collateral charge all affect what the mortgage costs you over its life. I have seen files where the cheapest advertised rate would have been the most expensive choice.
Do I pay you for this?
On a standard residential purchase placed with an A-lender, no. The lender pays the brokerage when the mortgage funds. If your file needs an alternative or private lender there can be lender and broker fees, and you would have those in writing well before agreeing to anything.
Can I use a gift from family toward the down payment?
Yes, and it is common. Lenders generally want a signed gift letter confirming the money is a gift rather than a loan, plus evidence of the source and that the funds have landed in your account. If the family member wants to go on title or co-sign instead, that is a different structure with different consequences and worth understanding first.
How long does a purchase take from application to completion?
It depends on the lender, the complexity of the file and how fast documents come back. A straightforward A-lender file and an alternative file requiring manual underwriting and an appraisal are not on the same timeline. You will get a realistic answer once I have seen the file rather than an optimistic one to win the business.
