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Mortgage Education Centre
Expert insights, practical guides, and local Alberta mortgage advice to help you make confident financial decisions.
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New to Canada Family Purchases their First Home in Calgary After Relocating from Quebec, Only 6 Months on the Job
Mortgage Snapshot Canadian mortgage solutions vary widely depending on your financial profile, credit history, and the type of property own. Understanding these options is crucial to making an informed decision. Purchase Price: $200,000 Mortgage Amount: $18,160 Property Type: Condominium Mortgage Term: 5 Years The Borrowers' Goal Purchasing a family home is more than buying a property. It's creating a place where lasting memories begin. After relocating from Quebec to Calgary six months earlier, the borrowers were ready to put down roots and purchase a family home. As newcomers to Canada with one borrower recently starting a new job and the other staying home to care for their child, they wanted a mortgage solution that would allow them to provide long term stability while remaining within their budget. Their goal was to purchase their first home in Calgary and begin building equity, all while navigating the mortgage process as newcomers to Canada with a limited employment history in Alberta. The Challenge Every mortgage application is unique. In this case, some of the factors we needed to navigate included: Landed in Canada less than 2 years ago Newly relocated from Quebec 6 months employment in Alberta Single income, spouse is homemaker Limited credit history Declined by 3 brokers & bank Our Solution After reviewing the available lender options, we developed a strategy that addressed the borrowers' situation and secured financing that met their needs. Getting application submitted immediately Gathering and reviewing all documents required Comparing available mortgage options ahead of time Understanding employment situation Uncovered additional income The Outcome Verified the borrowers previous work experience. Confirmed borrower receives Canada child benefit income. Application was placed under lenders' New to Canada program. Approval Summary Approval Time: 4 Business Hours Approved Mortgage Amount: $189,114 Property Location: Airdrie, AB About Big Springs, Airdrie, AB, Big Springs is one of Airdrie's most established communities, offering an affordable and family friendly lifestyle just minutes from shopping, schools, parks, and major commuter routes. Located in southeast Airdrie, the neighbourhood is known for its mature trees, spacious lots, and welcoming atmosphere, making it a popular choice for first time home buyers, growing families, and investors. Its convenient location near QEII Highway provides easy access to Calgary, making it ideal for commuters. Residents enjoy access to numerous parks, playgrounds, walking pathways, sports fields, and nearby recreational amenities. The community is just minutes from Genesis Place, one of Airdrie's premier recreation centres, offering fitness facilities, swimming pools, arenas, indoor fields, and year round programs for all ages. Families also benefit from several nearby schools and convenient shopping options, making everyday errands quick and accessible. Big Springs features a variety of housing styles, including detached homes, townhomes, and manufactured homes, providing options for a wide range of budgets and lifestyles. Its combination of affordability, established streetscapes, and strong sense of community continues to attract buyers looking for value without sacrificing convenience. Local residents frequently highlight the neighbourhood's mature landscaping, walking paths, and friendly atmosphere as reasons they enjoy living in the area. Whether you're purchasing your first home, upsizing, downsizing, or investing in Airdrie real estate, Big Springs offers an attractive balance of affordability, accessibility, and community living within easy reach of both Calgary and the many amenities Airdrie has to offer. Mortgage Tips for Buyers in Airdrie Some buyers may benefit from Mortgage Pre-Approvals Down Payment planning Credit optimization Debt consolidation strategies Understanding lender qualification requirements Working with an experienced mortgage broker can help identify suitable options across multiple lenders. New to Canada and Thinking of purchasing a new home? Whether you're purchasing your first home, upsizing, investing or refinancing, its important to understand your options. Disclaimer The mortgage approval scenario presented in this article is based on a real client experience; however, certain details may have been modified or generalized to protect client privacy. This mortgage approval example is provided for informational purposes only. Individual results will vary based on each borrower's financial situation, lender requirements, and market conditions. Approval terms and rates are not guaranteed.
Knowledge Library
Getting a Mortgage
Bank OR Broker
There are a lot of misunderstandings about mortgage brokers. Some people think our job is just about rate shopping and hunt for the lowest mortgage rates, while others assume we charge steep fees for something they could easily do themselves. Let’s set the record straight and break down what we really do, without the corporate lingo and with a bit of personality. So, What Exactly Do We Do? Think of us like wedding planners, but for mortgages. If you were getting married, would you rather spend hours researching and visit every venue, caterer, and DJ on your own? Or would you rather have an expert who knows the best options, negotiates deals, and makes sure you don’t accidentally book a cheese fountain buffet for guests are lactose intolerant? That’s us!
Instead of working with just one lender, we have access to multiple banks, credit unions, monoline lenders (who only do mortgages), and alternative lenders.
What?!?!? Yes, that's right! Mortgage brokers have access to banks!, some people think we don't! We also have access to monoline lenders, which the general public can only access through working with a mortgage broker!
This means we can find the best mortgage for your unique situation, not just whatever one institution is offering. More Choices, Better Rates Banks can only have access to their own mortgage products, meaning you’re limited to their rates, their rules, and their approval process. Sometimes its tough to qualify only under one guideline...
A mortgage broker, on the other hand, has access to multiple lenders—including banks, credit unions, and alternative lenders, so you get more options and a competitive rate that fits your financial situation.
For example, if you’re purchasing your very first home, you may also want to explore first-time home buyer programs in Edmonton that can make the process more affordable. The Big Question: How Do Mortgage Brokers Get Paid? Unlike a bank, which prioritizes its bottom line, a mortgage broker works for you. Our job is to find the best mortgage solution based on your financial goals, not to push a specific product.
Plus, in most cases, there are no fees to work with a broker! In rare situations, such as complex cases or private lending, there may be lender and/or brokerage fees, this will be mentioned upfront before deciding to proceed. No hidden costs. When your mortgage is finalized, the lender pays the brokerage and the brokerage pays us! Expert Advice & Smooth Process Mortgage brokers don’t just find great rates, we guide you through the entire process, help you understand the product, and make sure you don’t accidentally jeopardize your approval (like financing or leasing a new car before closing!). We also handle the paperwork and troubleshoot any issues that arise. If you want more options, expert advice, and a stress-free mortgage process, working with a mortgage broker is a no-brainer. Thinking about buying or refinancing? Let’s chat! I'd love to assist you in finding the best solution that fits your financial plan!
Give us a call or book a time!
Getting a Mortgage
Fixed vs Variable Rate Mortgages
What's the difference? Which one should you choose? Let's explore the key differences between these two popular options and help you make an informed choice tailored to your financial goals. Fixed Rate Mortgage Fixed rate mortgages provide stability and predictability, making them a popular choice among risk-averse borrowers, providing a peace of mind. Interest rate and mortgage payments remains constant throughout the mortgage term. This can be beneficial in a market with fluctuating rates. Depending on the mortgage product, the penalty for fixed rate mortgages are generally higher between the interest rate differential (IRD) or 3 months interest. Therefore, penalty may usually higher compared to variable rate mortgages. Variable Rate Mortgage Variable rate mortgages come with a level of flexibility tied to market conditions. Flexibility can lead to potential savings during periods of lower interest rates, this also has an element of uncertainty. If rates go up, then more interest is paid. Interest rate fluctuates based on changes to the mortgage prime lending rate. Depending on the mortgage product payments may change when mortgage prime rate changes. Some products will adjust the amortization until rates reach a trigger rate before the mortgage payments are adjusted. The penalty for variable rate mortgages are generally 3 months interest. Therefore, penalty may usually be lower compared to fixed rate mortgages. Factors to Consider Mortgage Product: There are many different types of mortgage products available. Lowest mortgage rates may not always be the best options. Some products may have less flexibility, restrictions, fees, etc. It is best to understand the product rather than just shopping for the best rate. Sometimes borrowers may end up paying more on lower rate products, due to fees and/or penalties. Comfortability: Understanding your risk tolerance is key. If you prefer a steady, unchanging payment structure, a fixed rate might be your preferred choice. If you're comfortable with some level of rate changes and want to take advantage of potential interest rate drops, then a variable rate could be appealing. Financial Planning: Getting the right mortgage is an important part of your financial goals. If knowing the exact mortgage payments for the entire term, a fixed rate aligns with stability. Conversely, if you are comfortable with some variability and seek potential cost savings, a variable rate might be worth considering.
If you’re carrying multiple debts, another factor to consider when choosing your mortgage type is how home equity can help with Calgary debt consolidation. Choosing between a fixed or variable rate mortgage ultimately depends on your unique financial situation, preferences and market conditions. Assess your comfortability, consider your financial goals and stay informed about market trends to make a decision that aligns with your homeownership journey. When in doubt, consulting with a knowledgeable mortgage professional can provide valuable insights tailored to your specific needs. Let us help guide you through your search. Understanding the nuances of fixed and variable rate mortgages empowers you to make a decision that supports your financial well-being. Not sure which is the best fit? Lets connect today to find the option that best suits your needs!
Getting a Mortgage
The RRSP Home Buyers' Plan (HBP)
Utilizing RRSP for Home Purchase: The Home Buyers' Plan (HBP) allows first time homebuyers to withdraw from their Registered Retirement Savings Plan (RRSP) tax-free. Considering combining the HBP with an FHSA for a larger down payment? Let's explore if this strategy suits you. What is the HBP Withdrawal Limit? As of April 16 2024, withdrawal limit is $60,000. You can withdraw funds from multiple RRSPs, provided you own each account.
Spouses or common-law partners can collectively withdraw up to $120,000 ($60,000 each) for a home purchase if both meet the eligibility criteria.
HBP permits tax-free withdrawals from your RRSP for a qualifying home purchase. Leveraging this program allows you to maintain your investment fund for future needs while repurposing your RRSP investment into a real estate purchase. When do you have to repay HBP? Repayable through installments over 15 years timeframe As of April 16 2024, those who withdraw funds from their RRSP between Jan. 1, 2022, and Dec. 31, 2025, will have up to 5 years to restart payments (instead of the previous 2 years) Do you qualify for HBP? Being considered a first-time homebuyer, intending to live in the home as a primary residence, and having a written agreement to purchase or build a qualifying home are vital prerequisites.
Must be considered a first time home buyer Written purchase agreement for building a qualifying home or existing home Intended use of the property is primary residence Can HBP be combined with an FHSA ? Presents an opportunity to merge two savings products towards your primary home investment. Unlike the HBP, the FHSA doesn't require repayment, allowing tax-free withdrawals based on eligibility conditions.
Exploring the HBP can be a strategic financial move, offering dual benefits as a retirement and real estate investment. While the repayment period affects interest accumulation, it might align with your overall financial strategy, aiding your initial real estate purchase. Is the RRSP Home Buyers' Plan worth it? Taking advantage of the home buyers' plan is a great way to boost your down payment without having to pay income taxes for the withdrawal (if repaid on time).
With a repayment period of 15 years, this is plenty of time to pay it back. Having access to RRSP funds helps you afford your first home purchase.
Since RRSP withdrawals under the Home Buyers’ Plan can affect how much you borrow, it’s also important to understand how mortgage interest rates work and how they impact your overall affordability.
Ready to explore how the Home Buyers’ Plan can boost your down payment? Contact me today and let’s find the mortgage solution that fits your financial goals.
Getting a Mortgage
Mortgage Down Payments
What is the minimum down payment to buy a house? Property Purchase Price Minimum Down Payment Up to $500,000 5% $500,001 to $1,499,999 5% of the first $500,000 + 10% for the amount over that $1,500,000 and above 20% (may vary depending on purchase price, location and lender) Rental Property 20% or more (may vary depending on purchase price) For down payments less than 20%, mortgage default insurance will be required. Commonly known as CMHC insurance.
There are three mortgage insurers in Canada. Canada Mortgage and Housing Corporation (CMHC), Sagen and Canada Guaranty.
Default insurance premiums are generally added on top of the mortgage amount. Some borrowers choose to pay it out of pocket. Down Payment Default Insurance 5% 4.00% 10% 3.10% 15% 2.80% 20% - Down payment for a home Advantages of a Larger Down Payment: Some benefits include Lower mortgage payments: Putting a bigger down payment means borrowing a smaller mortgage, resulting in lower mortgage payments Reduced interest costs: Smaller loan amount means you'll pay less interest over the life of your mortgage Easier mortgage approval: Less income is needed for a smaller mortgage, the more equity in the home means lower risk Strategies to Save for Your Down Payment: Set Clear Goals: Determine the amount you'll need for your down payment based on your target home price. Set a savings goal and create a budget to help you reach it. Automate Savings: Consider setting up automatic transfers to a dedicated savings account. This ensures that a portion of your income goes directly toward your down payment fund. Reduce Unnecessary Expenses: Take a close look at your spending habits and identify areas where you can cut back. Redirect those funds into your down payment savings. Additional Income: Explore ways to increase your income, such as taking on a part-time job or freelancing. Extra income can significantly accelerate your savings. Gifts and Windfalls: If you receive gifts or unexpected windfalls, consider directing a portion of these funds into your down payment savings. Assistance with down payment? Are you a first time home buyer? If so, there are programs such as first home savings account, RRSP home buyer plan, incentives and rebates that can help.
If you’re a first-time buyer, you may also benefit from exploring first-time home buyer programs in Edmonton that can help boost your down payment and make homeownership more affordable.
Non-repayable gifted down payments from a close family member.
Borrowed down payment is accepted by some lenders. Is your deposit part of your down payment? Absolutely! When making an offer for a home, providing a deposit is customary and is considered a component of your overall down payment.
For instance, if your total down payment is $50,000 and you've offered a deposit of $10,000, you'll be required to provide the remaining $40,000 at the time of signing. When do you need to provide your down payment when purchasing a home? At the time of your mortgage application, your down payment needs to be verified. However, you won't need to transfer the funds until your signing appointment with your lawyer to finalize the home purchase.
For ease of documentations, it is best not to move down payment funds around until your signing appointment. No Down Payment Mortgages Setting the record straight, there is no such thing as a $0 down payment mortgage or buying a house with no down payment.
Some of the mortgage options that make it appear like a no down payment mortgage would be borrowed down payment or equity take-out from an existing home. Some lenders have programs where borrowers can borrower the down payment as a loan, then use the funds as the down payment towards the purchase of a home.
Borrowers who currently own a home with equity can also take equity out of the existing home to buy a new home. No down payment? No problem! Let's see if other options work for your scenario :) Unsure of where to start? Let's connect, we can make a plan together!
First Time Home Buyers
First Home Savings Account (FHSA)
Increase down payment power! Combine together with RRSP Home Buyers Plan (HBP) or use it alone.
Are you a first time home buyer in Canada aiming to secure your down payment while enjoying tax benefits?
Understanding its contribution limits, eligibility criteria, and strategic advantages can help pave your way to home ownership. Maximizing FHSA Contributions for a Tax Free Down Payment FHSA allows eligible individuals to contribute a tax-deductible amount of up to $8,000 annually, accumulating to a maximum contribution limit of $40,000 within five years, assuming maximum annual contributions.
Important note, that annual unused contribution room is capped at $8,000, restricting the maximum yearly contribution to $16,000 (current year's limit + previous year's carry-forward). Tax Free Savings and Withdrawals Saving within an FHSA offers tax advantages, enabling growth on contributions tax-free. Additionally, withdrawals made for a qualified home purchase remain tax-exempt, including accrued interest from FHSA investments. FHSA Eligibility and Account Details To qualify for an FHSA, certain criteria must be met: Being at least 18 years old (or 19 in some provinces) Holding Canadian residency Meeting the Canadian government's definition of a 'first-time homebuyer'
As a first-time homebuyer, you must not have owned or jointly owned a qualifying home in the current calendar year or the preceding 4 calendar years. Utilizing FHSA Funds for Home Purchase FHSA withdrawals for a home purchase can be used towards various expenses beyond the down payment, such as closing costs, legal fees, and moving expenses. What Happens If You Don't Buy a Home? If funds remain after 15 years from the opening date (or upon reaching 71 years of age), transferring the amount to an RRSP or RRIF maintains the tax-deferred status. However, not using the funds for a home purchase forfeits the tax-free withdrawal benefit. Combining FHSA and Other Homebuying Options Consider combining FHSA benefits with other programs, such as the Home Buyers' Plan (HBP), allowing withdrawals from RRSPs for a home purchase, maximizing your down payment potential.
Funds withdrawn from RRSP through the home buyer plan must be repaid within 15 years to keep the tax deferral benefits.
Once you’ve built savings in your FHSA and are ready to buy, it may also be worth exploring whether now is the right time to refinance your mortgage in Alberta to take advantage of changing rates.
Ready to make the most of the First Home Savings Account for your first home? Contact me today and let’s build the best strategy for your down payment.
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