Home Mortgage in Canada

Banks don't lend to anybody. They want to make sure you are capable of paying back whatever you borrow so they ask 2 questions: First, is your income large enough to cover mortgage payments and other expenses?

Second, do you have enough cash to cover mortgage closing costs and put some money upfront as downpayment? Answers to both questions should be yes to proceed with home mortgage qualification.

To learn in depth how credit score, income factors, downpayment, monthly payment, documentation and closing costs affect home mortgage qualification:

• Mortgage and Credit Score
• Income and Mortgage
• Documents Needed for a Mortgage
• Mortgage Closing Costs
• Downpayment
• Mortgage Payments
• Mortgage Insurance

Do I Qualify for a Home mortgage?

Qualification is always relative to home value. Someone who qualifies for $200,000 mortgage may not qualify for a $500,000 loan. This calculator will help you determine if you qualify for a home mortgage. Enter desired mortgage amount, interest rate, mortgage length and mortgage calculator will estimate monthly payments.

Add a $100 to whatever the monthly mortgage payment this calculator produces (for taxes and insurance).

See how much interest you pay over years with a mortgage calculator.

Credit Score and Home Mortgage

Minimum qualifying mortgage credit score is 580. Anything lower will be turned down by most lenders.

The higher your credit score, the lower your interest rates.

The lower your credit score, the higher your interest rates.

Being late on credit cards, mortgages and other loans lowers your score. Paying your bills late is also bad for credit. Paying on time is one of the easiest ways to raise your score. For best interest rates – pay your credit cards and bills on time.

It's important to note that raising your credit score is a bit like losing weight: It takes time and there is no quick fix. In fact, quick-fix efforts can backfire. – fico.com

Learn in depth about mortgage and credit score, how it affects interest rates and payment factors that impact your score.

Home Mortgage Downpayment

Minimum downpayment is 5%. If you put less than 20% downpayment, you are required by law to get mortgage insurance which costs $60 - $175 per month. If you don't have money for down payment, you can withdraw up to $20,000 from Home Buyers Plan, provided by Canadian government. Lenders also want to see cash worth few months payments.

Learn more about mortgage downpayment.

Income and Mortgage Payments

• If you put less than 20% downpayment, the amount of your monthly income that can go towards monthly mortgage payments is restricted to 44%.
• If you put more than 20% downpayment, then up to 50% - 60% of your monthly income can go towards monthly mortgage payments.

Learn in detail about mortgage payment and income.

Home Mortgage Closing Costs

Closing costs range from 2% to 6% of your mortgage. Downpayment is not considered part of mortgage closing costs. Mortgage closing costs include lawyer fees, document preparation fees, home survey, government taxes and more. Learn in detail about mortgage closing costs.

Documents You Need for Home Loan

• Official letter of employment from the company showing amount you've earned this year and length of employment.
• Copy of the most recent T1 Tax Form.
• Financial bank statements.
• Property details
• Asset proof (ownership of the car, statement that shows you're the owner on the bank account, etc).

Learn in detail about required mortgage documents.

• Mortgage and Credit Score
• Income and Mortgage
• Documents Needed for a Mortgage
• Mortgage Closing Costs
• Downpayment
• Mortgage Payments
• Mortgage Insurance

Mortgage interest rates are subject to change without notice. We attempt to maintain accuracy on our website, however, mortgage information on this website should be used only as a guideline. Please consult a mortgage professional before taking any action.