How much can I afford to pay for a home?
To estimate your affordability, consider your taxable income, existing debts, and monthly obligations.

First, for purchasing a primary residence, calculate 39% of your income for mortgage payments, property taxes, and heating costs. Include half of your estimated monthly condominium fees if applicable.
Next, calculate 44% of your taxable income, then subtract all your monthly debts such as car loans, credit card payments, and lines of credit.

Use the lesser of these two amounts to determine the portion of your income available for housing expenses, including your mortgage. These guidelines align with typical lender standards.

Beyond these ratios, we'll help you identify a comfortable debt level. If less than 39% of your income, consider borrowing less to avoid financial strain or "house poor" scenarios, ensuring you have funds for other expenses and leisure.

Additionally, you must qualify for your mortgage under new federal stress-test regulations.

For assistance, try our Mortgage Affordability Calculator.

What is a home inspection and should I have one?
Yes, a home inspection is strongly recommended. It involves a professional visual assessment of the property's condition, examining key areas like the roof, foundation, electrical, plumbing, and systems.

The inspector provides a detailed report within approximately 24 hours, highlighting any issues or repairs needed. This process helps you make an informed decision, uncover potential problems, and plan future maintenance, ultimately reducing surprises and increasing your confidence in the purchase.

What is the minimum down payment needed?
A minimum down payment of 5% is required, and an additional 10% for any purchase over $500,000.

For example. If you are buying a property worth $650,000 then you need a total of $40,000. ($25,000 which is 5% of $500,000 and $15,000 for the amount over $500,000).

You also need to cover closing costs like legal fees, potential appraisals , and surveys if necessary.

At least 5% of your down payment must come from your own funds or a gift from a family member. For non-residents and newcomers, this rises to 10% and cannot be borrowed.

Gifts from family are usually acceptable with a signed letter. If the down payment is less than 20%, mortgage insurance will be required, issued by CMHC, Sagen, or Canada Guaranty.

What is mortgage loan insurance?
It is mandatory for high-ratio mortgages (LTV over 80%), protecting lenders against borrower default. The cost ranges from 0.50% to 7.0%, paid upfront or added to your mortgage. Note, this is different from mortgage life insurance.

What is a conventional mortgage?
Typically, it involves a down payment of 20% or more, with an LTV of 80% or less, and doesn't require mortgage insurance. Interest rates may be slightly higher to compensate for the lack of insurance.

How does bankruptcy affect mortgage qualification?
Post-bankruptcy, rebuilding credit can be challenging, but some lenders may consider mortgage options depending on circumstances. Consult with our brokers for guidance.

How does child support impact mortgage eligibility?
Child support or alimony paid is usually deducted from your income, reducing your loan amount. If you receive support, the income may be added back in, provided proof of regular receipt is available.

Can I qualify to buy a home?
Yes, with qualifying income and credit. Even with as little as 5% down, you might qualify, especially with government programs and rebates aimed at first-time buyers. For homes needing renovations, a Purchase Plus Improvements mortgage covers upgrade costs.

Can gift funds be used for a down payment?
Yes, most lenders accept gifted funds with a signed letter confirming it's a true gift, not a loan. If mortgage insurance is needed, the gift amount should often be in your possession before approval.

What is a pre-approved mortgage?
It provides an estimate of your maximum loan amount with a rate guarantee for 60-120 days. It streamlines the home-buying process but isn't an absolute guarantee. It requires financial and credit info, helping you target suitable property prices.

When can I renew my mortgage?
Start the renewal process up to 120 days before your current term ends. Early renewal allows negotiation for better rates. Compare offers to ensure you're getting the best deal.

What is a down payment?
It's the initial amount you contribute toward buying a home, showing your commitment and creating equity. Larger down payments reduce overall costs and interest.

Can I buy with just 5% down?
Yes, with mortgage default insurance, which protects the lender when the down payment is under 20%. Premium costs are paid by the borrower, included in payments or upfront.

How can I pay off my mortgage faster?
Consider increasing payments through biweekly schedules, making lump sum payments, doubling monthly payments, or choosing shorter amortization periods to reduce interest costs and build equity quicker.