Home Buying FAQ

We've put together a list of common mortgage and home buying questions to help you better understand the process of buying a home.  If you don't see your question below, contact Steenbeek Mortgage Team directly for additional guidance.


Q: Why use a mortgage broker?

A: While the banks can only offer you their own products, we have access to a number of lenders that provide a wide range of mortgage products and terms to choose from


Q: What is the benefit of getting pre-approved?

A: A mortgage pre-approval is just like applying for a mortgage, but it’s done before you shop for a home. You will determine how much you can afford and the price range you can shop in. If you choose a fixed interest rate mortgage, you are guaranteed a rate during the pre-approval period, so you are protected if interest rates rise while shopping for a home. If interest rates lower in that period, you will receive the lowest rate available.


Q: How much of a downpayment will I need?

A: The minimum down payment required to purchase a home in Canada depends on the property's purchase price. The down payment is calculated as a percentage of the purchase price. Here are the minimum down payment requirements:

For homes with a purchase price of less than $500,000: The minimum down payment is 5% of the purchase price.

For homes with a purchase price between $500,000 and $999,999: The minimum down payment is 5% of the first $500,000, plus 10% of the portion between $500,000 and $999,999.

For homes with a purchase price of $1 million or more: The minimum down payment is 20% of the purchase price.

It's important to note that these requirements may vary based on specific lending institution policies and other factors. It's always a good idea to consult with a mortgage broker or lender to get the most accurate and up-to-date information for your particular situation.


Q: What is the difference between High Ratio Mortgage Insurance and Mortgage Life Insurance?

A: When you purchase a home in Canada with less than a 20% down payment, it is considered a high ratio or insured mortgage. Canada Mortgage and Housing Corporation (CMHC), Genworth Financial and Canada Guarantee are default insurance companies that protect lenders in the event a borrower defaults on their mortgage. If a borrower stops making their mortgage payment, the insurer will handle the legal proceedings and compensate the lender if there is a loss after the property has been sold. Default insurers charge a one-time insurance premium, included on top of your mortgage amount. 


Q: What is the best term to consider?

A: Usually the shorter the term, the lower the rate. However many people prefer the comfort of a longer mortgage term for its stability. We often recommend a longer term for first-time buyers. Variable rate mortgages are also a very attractive product that may be right for you. Talk to us to determine whether fixed or variable is best suited for you. 


Reach out to Steenbeek Mortgage Team today to answer any other mortgage questions you may have!!