Getting a Mortgage in Canada: Your Complete Guide

mortgage in canada

Getting a mortgage in Canada might feel overwhelming, but it doesn’t have to be. Once you understand what information your lender requires, the process becomes easier. Now, Are you ready to buy a home in Canada? We’re here to help! This guide explains everything you need to know about getting a mortgage. We’ve covered you, from the application process to different mortgage types and finding the best rates. By the end, you’ll feel confident to make informed decisions and turn your dream of homeownership into reality. Let’s get started on this exciting journey together!


Are you ready to buy?

Before exploring how to get a mortgage, consider if you’re truly ready to buy a home. Pay attention to important factors like:


Your Financial Health

Assess your debts, like credit cards, student, or auto loans. Reduce credit card debt or consolidate loans before getting a mortgage.


Savings and Deposit

You need a significant deposit to buy a home in Canada. If you can’t afford the standard 20 percent down payment, there are other options, but they may require mortgage insurance. This insurance can cost $100 to $150 monthly, adding up over time. Besides the down payment, it’s essential to set aside 1.5 – 4 percent of the home’s selling price for closing costs, payable on closing day.


Credit Score

Your credit score is crucial when applying for a mortgage. A good long-term income and low debts make banks happy, but a bad score can make getting a mortgage or other credit tough. Your credit history also affects the interest rate you’ll be offered. In Canada, a score of 730 or higher is considered good, while 800+ is excellent. You can check your score with Equifax and TransUnion, Canada’s two major credit bureaus.


Life-related Aspects

Buying a home has a significant impact on your lifestyle, and it involves various financial factors. While owning a home can bring long-term financial benefits, it may also come with stress and compromise. Homeownership might be unsuitable if you prefer the flexibility to move frequently. Similarly, owning a home may not be the right choice if you desire to live in specific areas without compromises or lack stable employment.

The illustration of getting your dream home with a mortgage in Canada.

Which type of mortgage do you want to choose?

When deciding on the most suitable mortgage for your needs, it’s essential to take the following factors into account:

  • Mortgage term: How long the contract will be, from a few months to several years.
  • Amortization period: This refers to the length of time it takes to repay the entire mortgage loan. A longer period means lower payments but more interest paid overall.
  • Interest rate: Choose between fixed (stays the same) or variable (changes) rates.
  • Payment options: Decide on monthly, weekly, or accelerated payments.
  • Open/closed mortgage: Open is more flexible but comes with higher interest, while closed offers lower rates but less payment flexibility.


Key Steps in the Mortgage Process

Knowing the essential stages of the mortgage process is vital for a successful application. Let’s explore each step together, making your journey to becoming a homeowner smooth and confident.


Evaluating various mortgage lenders

When comparing different mortgage lenders, look at their mortgage products, fees, and interest rates. You can do this by checking out online mortgage offers from various Canadian financial institutions. Another way is to work with a mortgage broker who will compare rates and products from multiple lenders to find the best options for you. Just make sure to choose an experienced broker with positive reviews.


Apply for mortgage pre-approval

Mortgage pre-approval offers the advantage of knowing the maximum mortgage amount you qualify for beforehand. This knowledge lets you plan your budget and assures sellers that a lender will support your offer on their property. When seeking mortgage pre-approval, you must provide essential documentation, including your identification, proof of employment, evidence of your ability to afford the down payment and closing costs, and details about your debts and personal assets. By going through the pre-approval process, you’ll be better prepared to make informed decisions and confidently move forward in your home-buying journey.


Looking for a Property

Once you’re pre-approved, finding a property becomes easier. Look for a home in your price range, considering factors like location, size, and neighborhood. When you find the perfect one, make an offer.


Assessing Your Financial Situation

The lender will check your financial background to decide if you qualify for a mortgage. They’ll look at various things to see if you’re eligible. They’ll check your income proof, credit score, and Debt-to-Income Ratio. A good credit score and stable cash flows increase your chances of approval. If you have pre-approval, some lenders may skip this step.


Closing the Deal

Once your lender approves your mortgage, it’s time to finalize the deal. You’ll attend a closing meeting to ask any final questions and sign the agreement. Remember to bring your ID and Closing Disclosure. After signing, the home is officially yours.


The illustration of a Step-by-step guide to the mortgage process

How to get a first mortgage in Canada?

To get a mortgage, you need to show your lender that you can afford it. They look at your finances to see how much you can pay each month and your overall debts. This helps them decide if you qualify for the mortgage.


How much do you need to make to get a mortgage in Canada?

The income needed for mortgage approval varies based on factors like the location, deposit, and property cost. In major Canadian cities, the required income ranges from $73,752 to $268,000. A detailed look at each province in the report of RBC (Royal Bank of Canada) can show the income ranges and help assess the feasibility of buying a home in your area.


What credit score do you need in Canada to get a mortgage?

Your credit score plays a vital role in getting a mortgage. The higher your score, the better your chances of approval and a favorable interest rate. In Canada, scores range from 300 (poor) to 900 (excellent). A score of 660 or higher is good and shows you are a reliable borrower. Most traditional mortgages require a minimum score of around 680, which may vary by lender and mortgage type. Aim for a score of 700 or more when applying for a mortgage to be considered excellent.


How long does it take to get mortgage approval in Canada?

The pre-approval process is quick, usually only taking two or three days. However, the overall time for mortgage approval depends on various factors and can take around a month or so on average.



You’ve now learned all you need to know about getting a mortgage in Canada. With this guide, you can confidently navigate the process and understand your financial obligations. Remember, a mortgage is your ticket to owning a home, so take charge of your future, seek expert advice, and turn your homeownership dream into reality. You’re ready for this exciting journey toward your dream home.

If you’re feeling uncertain, don’t worry! The Can Guard’s mortgage experts will help you every step of the way during your mortgage application.

5/5 - (1 vote)

Leave a Reply

Your email address will not be published. Required fields are marked *