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You’re just a few steps away from getting one of the lowest rates in Canada.
By providing your email and phone number, you authorize Citadel Mortgages Brokerage #12993). to contact you about your inquiry. The interest rate shown is for estimation purposes only and may change upon consultation with a mortgage professional.
Thank you one of our agents will be in touch with you shortly! In the meantime to save time please select an option below:
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You’re just a few steps away from getting one of the lowest rates in Canada.
By providing your email and phone number, you authorize Citadel Mortgages Brokerage #12993). to contact you about your inquiry. The interest rate shown is for estimation purposes only and may change upon consultation with a mortgage professional.
You’re just a few steps away from getting one of the lowest rates in Canada.
By providing your email and phone number, you authorize Citadel Mortgages Brokerage #12993). to contact you about your inquiry. The interest rate shown is for estimation purposes only and may change upon consultation with a mortgage professional.
You’re just a few steps away from getting one of the lowest rates in Canada.
By providing your email and phone number, you authorize Citadel Mortgages Brokerage #12993). to contact you about your inquiry. The interest rate shown is for estimation purposes only and may change upon consultation with a mortgage professional.
If your down payment is below 20%. Under the regulations of the Office of the Superintendent of Financial Institutions (OSFI), you are required to purchase mortgage default insurance, also known as CMHC insurance.
For more information, see the Glossary and FAQ below.
Mortgage refinancing can be a little overwhelming sometimes. All day we see a lot of advertisements from banks and lenders with today’s lowest mortgage interest rates. However, lower rates don’t always mean that it’s a better mortgage for you. Using a mortgage broker for mortgage refinancing can eliminate the confusion and ensure you fully understand what the new mortgage rules are and how they can impact your new mortgage refinance.
Most home buyers will obtain a mortgage from an A-lender, usually a major bank or credit union. However, many self-employed home buyers experience difficulty passing their federally regulated stress tests. Your affordability may be significantly reduced if you apply for a mortgage at an A-lender institution.
Read More…
Due to these difficulties, B-lenders have become an increasingly popular option among self-employed home buyers. While B-lender interest rates are higher than those of A-lenders, you’re likely to be approved for a much larger mortgage than at a traditional bank or credit union.One key point here is how they account for your income compared to how the banks account for it. To learn more about B-lenders and determine what option is right for you, we suggest booking a free consultation with our professional mortgage broker.
Starting September 2, 2019, the Government of Canada is launching a shared-equity incentive for first-time buyers. The incentive essentially allows the government to pay for 5% or 10% of your home, reducing the amount you need to mortgage. You will need to repay this equity in a lump-sum up to 25 years after purchase. See our first-time buyer calculator for more details.
According to the values you have entered, you are eligible for the incentive if your annual household income is between $112,500 and $120,000. If you choose to take the incentive, your incentive amount and new mortgage amount (including the CMHC insurance premium) are shown below.
An “open-term mortgage” is an appealing option to those who plan on paying off their mortgage sooner rather than later. This type of mortgage can be repaid fully or partially at any time without prepayment interest fees. If you want to convert them to another term, you can do so at anytime again without prepayment interest fees. The interest rates for open mortgages tend to be higher than those of closed mortgages because they have such flexibility and options for you as a client. Keep in mind these types of mortgages may have other fees involved as well, so it is best to talk to one of our mortgage agents to ensure you understand all the terms!
A “closed-term mortgage” is the most common choice for people who aren’t planning to pay off their mortgage in the near future. The interest rates for closed term mortgages tend to be lower than that of open mortgages. With closed term mortgages, you’re able to save on interest costs, and hopefully, this will help you to pay your mortgage back faster. Fixed or variable options are available for closed term mortgages, but there’s a restriction on the principal amount that you can pay towards our mortgage each year.
If you want to renegotiate your rate, you will need to pay a prepayment charge. Also, you will need to pay this prepayment charge, if you wish to pay off the balance of your mortgage before the end of the term or if you want to prepay more money than your mortgage will allow you to.Also there are some closed mortgages that you are not allowed to pay off the mortgage at all until end of term which can make it hard to do refinancing in the future, again these are common terms that can cost thousand of dollars in the future and it is best to ask one of our mortgage agents to assist you in obtaining your mortgage so we can explain all the terms to ensure a smooth mortgage transaction.
With prepayment charges, you have the flexibility to increase your monthly payments or to pay the whole thing off. Contact our team of mortgage agents to find out more about your prepayment options.
More than 50% of Canadians have fixed mortgage rates, which means the monthly payment stays the same over the full term. You are protected against fluctuating interest rates so that it can set up and you don’t have to worry about it. If you want stability – this may be the best option for you, but we have to look at your complete financial picture to ensure this.
With a variable mortgage, your rates are typically lower, but they will vary over the term. Your payments will be based on market behavior, and this will affect how much you are paying. The amount that you are paying will change over time but can also reduce the amount of interest you pay over your mortgage term or even help you pay off your mortgage faster.
A home equity line of credit (HELOC) is a revolving line of credit that allows you to borrow the equity in your home at a much lower interest rate than a traditional line of credit. Home equity is the current market value of your home minus the remaining balance of your mortgage. Essentially, it's the amount of ownership of a property you have built up through both appreciation as well as reductions in the mortgage principle made through your mortgage payments. So, as you pay off your mortgage and build equity in your home, a HELOC gives you the ability to reborrow a portion of these funds. You can use HELOC funds at your discretion for renovations, debt consolidation, higher education or anything else you need. Just remember that the HELOC is secured by your home and cannot exceed 65% of your home's value.
With a HELOC mortgage, the entire line of credit available is not advanced upfront. Rather, you have the freedom to use as much or as little of the HELOC as you choose, and you only pay interest on the amount you have withdrawn. Interest is calculated daily at a variable rate attached to Prime, however, HELOC rates are often higher than variable mortgage rates and the relationship to Prime can technically change anytime at the choice of your lender. For example, a variable mortgage rate is often Prime +/- a number, like Prime – 0.35%. HELOC rates, however, are set at Prime + a number and your lender can technically change that number anytime.
The minimum amount of a HELOC varies from bank-to-bank, with some institutions not offering the product at all. The maximum HELOC amount is calculated as 65% loan-to-value of your home, as seen in the example calculation above.
HELOCs are described as having a revolving balance, because borrowing multiple times within the account for any amount up to the allowable credit limit does not require writing a new loan document. The credit limit can also be increased as the equity in your home grows.
It is sometimes possible to divide up your HELOC into smaller portions through different sub-accounts. An example of where this may be used is if you wanted to draw out equity to invest in the stock market. In this case, the interest you pay on borrowed money is tax deductible. So having a separate account makes it easier to track the money.
You can sometimes convert a portion of your outstanding borrowed HELOC funds to a fixed rate, which you will then pay like a standard mortgage.
This means that you can hold your mortgage with one bank and get a HELOC with another bank. A HELOC is not necessarily a “second mortgage". A "first" or "second" mortgage is used to refer to the loan's claim position. A HELOC is often second position because there is another mortgage on the property at the time. However, it is possible to have a HELOC in first position. HELOCs usually have higher interest rates because it is assumed that they will be in second position and, as a result, are riskier to the lender. In the case of you defaulting, the lender in second position is not repaid until the first position lender is.
Current Mortgage Information Statement – Must be dated the same month as your application form, if you do not have one you can contact your mortgage lender and request one to be sent to you by email.
Most recent property tax statement – If you do not have this, then you can get the most updated statement from your local city hall.
Most recent NOA may be requested to show no income tax owing – If income tax owing, it will need to be paid out from the new home equity loan upon closing.
Job Letter and most recent pay stubs
Other documents may be required, our mortgage agents here at Citadel Mortgages will help you if any additional documents are needed for your home equity line of credit (HELOC) needs.
An “open-term mortgage” is an appealing option to those who plan on paying off their mortgage sooner rather than later. This type of mortgage can be repaid fully or partially at any time without prepayment interest fees. If you want to convert them to another term, you can do so at anytime again without prepayment interest fees. The interest rates for open mortgages tend to be higher than those of closed mortgages because they have such flexibility and options for you as a client. Keep in mind these types of mortgages may have other fees involved as well, so it is best to talk to one of our mortgage agents to ensure you understand all the terms!
A “closed-term mortgage” is the most common choice for people who aren’t planning to pay off their mortgage in the near future. The interest rates for closed term mortgages tend to be lower than that of open mortgages. With closed term mortgages, you’re able to save on interest costs, and hopefully, this will help you to pay your mortgage back faster. Fixed or variable options are available for closed term mortgages, but there’s a restriction on the principal amount that you can pay towards our mortgage each year.
If you want to renegotiate your rate, you will need to pay a prepayment charge. Also, you will need to pay this prepayment charge, if you wish to pay off the balance of your mortgage before the end of the term or if you want to prepay more money than your mortgage will allow you to.Also there are some closed mortgages that you are not allowed to pay off the mortgage at all until end of term which can make it hard to do refinancing in the future, again these are common terms that can cost thousand of dollars in the future and it is best to ask one of our mortgage agents to assist you in obtaining your mortgage so we can explain all the terms to ensure a smooth mortgage transaction.
With prepayment charges, you have the flexibility to increase your monthly payments or to pay the whole thing off. Contact our team of mortgage agents to find out more about your prepayment options.
More than 50% of Canadians have fixed mortgage rates, which means the monthly payment stays the same over the full term. You are protected against fluctuating interest rates so that it can set up and you don’t have to worry about it. If you want stability – this may be the best option for you, but we have to look at your complete financial picture to ensure this.
With a variable mortgage, your rates are typically lower, but they will vary over the term. Your payments will be based on market behavior, and this will affect how much you are paying. The amount that you are paying will change over time but can also reduce the amount of interest you pay over your mortgage term or even help you pay off your mortgage faster.
The down payment is the amount you will pay upfront to obtain a mortgage.
Your minimum down payment depends on the purchase price of your property.
If you’re self-employed or have poor credit, your lender may require a higher down payment.
Yes. If your down payment is below 20% of the purchase price,
For more information, see the section on CMHC insurance below.
Term for a second mortgage:
A term for a second mortgage is usually only a 6 months or 1 year term.
Interest for a second mortgage:
The interest rate will always be higher due to the fact the mortgage sits in second position and there is more risk to the investor or lender.
Appraisal cost :A appraisal has to be done to determine the value of the home – Most clients pay for this upfront.
Fee :The lender will charge a lender fee for lending the mortgage for this mortgage
Brokerage Fee : The mortgage agent will charge a fee for arranging the mortgage on for yourself.
Lender Legal Fees : The client pays for the legal fees for closing the mortgage that the lender incurs.
Borrower Legal Fees: The client pays for the cost of having their own lawyer to close the mortgage.
**Please note there may be other fees involved it is important to read the commitment with your mortgage agent and ask any questions that is needed to clarify any other fees.***
These Documents will be required in order to close your second mortgage:
Must be dated the same month as your application form, if you do not have one you can contact your mortgage lender and request one to be sent to you by email.
If you do not have this, then you can get the most updated statement from your local city hall.
may be requested to show no income tax owing – If income tax owing it will need to be paid out from the new second mortgage upon closing.
Please note this calculation is used for demonstration purposes only, to demonstrate to maximum potential second mortgage amount as well as monthly payments calculated based on interest only payments (no amortization), with an interest rate of 12 %. Please note Borrower subject to credit and underwriting approval. Not all borrowers will be approved for conventional financing or equity financing. Receipt of borrower’s application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, Annual APR is subject to approval and underwriting, APR includes all fees and rate which is calculated on a yearly term. APR varies contact us for current rates or more information on a specific product. OAC*
To determine if you can save at a lower mortgage rate, use our calculator to compare the monthly interest savings against the cost to refinance. As most mortgage brokers and lenders will cover your legal costs if you are just transferring your mortgage which means no equity take out, the only cost you need to worry about is your mortgage break penalty. This penalty is charged by your lender for breaking your mortgage contract early and is based on your original contract date and current mortgage balance and rate.
If you’re considering a refinance to access home equity, you’re not alone. According to the Canadian Association of Mortgage Professionals, last year 10% of Canadian mortgage holders accessed an average $49,000 of equity from their homes. The large majority of this equity was used for debt consolidation or home renovation. If refinancing for equity, the first thing you want to determine is the maximum amount of equity you can access. In Canada, mortgage holders can access a maximum of 80% of their homes value less any outstanding mortgage balance. Unfortunately accessing this equity comes at a cost – your lender will change you a penalty for breaking your mortgage early. If you’re refinancing in a falling interest rate environment, you may be able to take advantage of interest savings as a bonus.
The amortization period is the total length of time over which you plan to pay off your mortgage.
While we cannot give advice for your specific situation, here are some general guidelines:
The term of your mortgage is the length of time for which you sign a legal agreement with your lender. For the length of the term, you are obligated to their conditions and penalties.
The most common term length in Canada is 5 years. Unless you have specific concerns, a 5-year term generally works well. Each lender will offer different options for term length and rates; contact your lender for more details.
For professional help with determining which term is right for you, please .
At the end of each term, you have the option to renew or refinance your mortgage.
The interest rate determines how much interest is added to the unpaid portion of your mortgage loan.
A higher interest rate can significantly increase your monthly or bi-weekly payment, as well as inflate the term and lifetime cost of your mortgage. Conversely, a lower interest rate can save you tens of thousands of dollars over time.
Your variable interest rate is directly controlled by your lender via their prime rate. Each lender can choose to increase or decrease their own prime rate, in turn increasing or decreasing your variable interest rate.
Lenders will usually adjust their prime rate to reflect changes in the Bank of Canada’s Policy Interest Rate. This means that lenders will tend to have similar or identical prime rates. All major Canadian banks currently have a prime rate of 3.95%.
Getting the lowest rate isn’t always the best option – If you want to become mortgage free sooner then the All in One Mortgage Solution from Citadel Mortgages may be best for you.
As we always hear, your money should never sit around. In fact, your money should always be working for you! What does this mean, though?
For years the banks have taught us we need to keep our debts including our mortgage separate from our savings, income, and investments, but why? Think about if you have a checking account that has a line of credit attached to it and regular savings account at the bank and you go to deposit your money into the bank. Which account will the bank choose to put the money in? (Hint it is never the account with the line of credit.) The banks have always wanted us to keep our debt high to make interest, but the secret is to have our money work for us, not the bank!
Traditional banking keeps what you have (your earnings, savings, short-term investments, etc.) separate from what you owe (your mortgage, loans, credit cards etc.). By doing this, you earn a lower rate of interest on your deposits and savings while paying a higher rate of interest on what you borrow, which are your debts like your mortgage and credit cards. This keeps you in debt longer and paying more interest over time, making it harder for you to retire at a decent age!
However, what if your deposits and your borrowing were combined into a single account so that every dollar you earned automatically went towards paying down your debt? That’s exactly what the All in One Mortgage Solution provides! It brings your mortgage, savings, and income together to help you: save thousands in interest; be debt-free years sooner; enjoy financial flexibility; and simplify your everyday banking. This mortgage product is also calculated daily with interest rather than the standard way of semi-annually, because the interest is calculated daily this offers significant savings over a traditional mortgage. With the All in One Mortgage Solution, every dollar you deposit goes towards paying off your debt, every day
The payment frequency determines how often you will make mortgage payments.
While we cannot give advice for your specific situation, here are some general guidelines:
Mortgage default insurance, also known as Canada Mortgage and Housing Corporation (CMHC) Insurance, protects your mortgage lender in the case of default.
Under Office of the Superintendent of Financial Institutions (OSFI) regulations, you are required to purchase CMHC insurance if your down payment is below 20%.
You may be ineligible for CMHC insurance if:
In these cases, you must make a down payment of 20% or higher.
Your CMHC insurance cost is calculated as a percentage of your purchase price. The exact percentage depends on your down payment amount, and decreases for larger down payments.
Since March 17, 2017, the following CMHC premiums apply in most situations:
| Down Payment (% of Purchase Price) | 5–9.99% | 10–14.99% | 15–19.99% |
|---|---|---|---|
| CMHC Insurance (% of Mortgage Amount) | 4.00% | 3.10% | 2.80% |
Your lender is actually the party responsible for paying CMHC insurance costs. In the majority of cases, your lender will pass these costs down to you by adding the CMHC insurance premium to your mortgage loan amount. This will slightly increase your monthly or bi-weekly payment.
In some cases, your lender may allow you to pay CMHC insurance costs as a lump-sum, or not pass down the cost to you at all. Contact your lender for more details.
A mortgage with a down payment below 20% is known as a high-ratio mortgage. The term ratio refers to the size of your mortgage loan amount as a percentage of your total purchase price.
All high-ratio mortgages require the purchase of CMHC insurance, since they generally carry a higher risk of default.
• Current Mortgage Information Statement – Must be dated same month as your application form, if you do not have one you can contact your mortgage lender and request one to be sent to you by email.
• Most recent property tax statement – If you do not have this, then you can get the most updated statement from your local city hall.
• Most recent NOA
• Job Letter and most recent paystubs
• Last 2 Years T4s
• If Self employed need the following:-
• Master business license or articles of incorporation
• 6 months bank statements
• Last 2 Years T1s – may be required
• Other documents may be required
Please note this calculation is used for demonstration purposes only, to demonstrate to maximum potential second mortgageamount as well as monthly payments calculated based on interest-only payments (no amortization), with an interest rate of 12%. Please note the Borrower subject to credit and underwriting approval. Not all borrowers will be approved for conventional financing or equity financing. Receipt of borrower’s application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, Annual APR is subject to approval and underwriting, APR includes all fees and rate which is calculated on a yearly term. APR varies contact us for current rates or more information on a specific product. OAC*
There are three main incentive programs for first-time home buyers. Each program has different requirements to qualify as a first-time buyer. See the FAQ below for details.
| Land Transfer Tax Rebate | $ | 250.00 | |
|---|---|---|---|
| + | Government Shared-Equity Incentive Starts September 2, 2019. For purchases closed after November 1, 2019 only. |
$ | 2,500.00 |
| = | Total Incentive | $ | 2,750.00 |
The government of Canada offers a First-Time Home Buyer Incentive program starting September 2, 2019. Under the program, you can apply for a 5% or 10% shared-equity mortgage with the Government of Canada, reducing your mortgage payments. Essentially, the government will help you purchase 5% or 10% of your home, to be paid back at a later date.
You are eligible to apply for 5% of your purchase price in shared equity. Given your selections, you are eligible for a maximum of $2,500 in government incentives.
The program is only available for CMHC-insured mortgages. Therefore, you are automatically ineligible if
To qualify for a government shared-equity incentive,
Even if you satisfy these criteria, there are limits on how much you can borrow depending on your annual household income. See ‘What is the borrowing limit, and how does it work?’ below. Other criteria may apply in special situations.
You qualify as a first-time home-buyer if
You only need to satisfy at least one of the above criteria to qualify. Only one spouse/common-law partner needs to meet the above requirements to qualify.
The program launches September 2, 2019, and is available for any purchase closed after November 1, 2019.
The program will end either:
whichever occurs sooner. Many experts expect the funding to go quickly, so it may be prudent to act as soon as possible.
Borrowing limits may apply in both of these cases. See ‘What is the borrowing limit, and how does it work?’ below.
Your borrowing limit is four times your annual household income. Your total borrowing amount (mortgage principal + shared-equity incentive) cannot exceed this limit. The CMHC mortgage insurance premium does not count towards the limit.
No partial incentives are given. The only options are 5% and 10% shared-equity.
The amount you owe depends on the future fair-market value of your property at the time of repayment. You will need pay 5% or 10% of the future property value, depending on which incentive program you applied for. No interest is charged in either case.
You must pay back the incentive within 25 years or if the property is sold, whichever occurs first. You must pay the amount in full.
There are no prepayment fees or penalties for an early payment. If you believe your property value will rise in the future, paying early may lower your payment amount.
Yes. However, you can only apply for the 5% shared-equity incentive option, even if the home is new.
John and his wife want to buy a newly constructed home for $400,000. They would qualify for 10% of the purchase price, or $40,000, under the shared-equity incentive program.
At a 3% interest rate, this would lower their monthly payment from $1,870 to $1,673, saving them nearly $200 per month, or $60,000, over the lifetime of the mortgage.*
Assuming they make the minimum 5% ($20,000) down payment, John and his wife would need to make between $95,000 and $120,000 in total to qualify.
*Assuming a 5-year fixed term with 25-year amortization and 5% down payment.
Marissa makes $80,000 a year, and has $60,000 saved up for a down payment.. To qualify for the shared-equity incentive, she can purchase a home worth up to $380,000.
She buys a resale condo for $360,000. Marissa is eligible for $18,000 from the Government of Canada First-Time Home Buyer Incentive, allowing her to take out a mortgage of only $282,000 plus insurance.
When you acquire a property (and the land it rests on), you must pay a land transfer tax to the government after the transaction closes. As a first-time home buyer, you are eligible for land transfer tax rebates, often worth thousands. A detailed breakdown of your land transfer tax costs and savings is below.
| Provincial | $ | 250.00 | |
|---|---|---|---|
| + | Municipal | $ | 0.00 |
| − | Rebate | $ | 250.00 |
| = | Total Tax | $ | 0.00 |
Ontario levies a land transfer tax by applying a tax-bracket system to your property’s purchase price. The full breakdown of your provincial land transfer tax is shown below.
| Tax Bracket | Marginal Tax Rate | Marginal Purchase Price | Marginal Tax | ||||
|---|---|---|---|---|---|---|---|
| First $55,00055k | 0.5% | × | $ | 50,00050k | = | $ | 250250 |
| $55,00055k to $250,000250k | 1.0% | × | $ | 00 | = | $ | 00 |
| $250,000250k to $400,000400k | 1.5% | × | $ | 00 | = | $ | 00 |
| $400,000400k to $2,000,0002.00m | 2.0% | × | $ | 00 | = | $ | 00 |
| Over $2,000,0002.00m | 2.5% | × | $ | 00 | = | $ | 00 |
| Total Tax | $ | 250250 | |||||
Starting January 1, 2017, Ontario offers a land transfer tax refund of up to $4,000 for first-time home buyers. Since your provincial tax exceeds the rebate limit, your provincial rebate is capped at $4,000.
Toronto is the only city in Ontario that levies a municipal land transfer tax. According to your selections, municipal land transfer tax does not apply to you.
To qualify as a first-time home buyer, you must meet all of the following criteria:
You may obtain an immediate refund at the time of registration.
Yes, if you act quickly. You may claim your rebate at any point within 18 months of purchase.
Yes, in certain cases. After the purchase of a property, you have an 18-month window following registration to obtain a rebate. If you gain citizenship or permanent residency during this period, you can claim the full rebate amount.
The Non-Resident Speculation Tax (NRST), also known as land speculation tax, is a 15% tax on residential property in areas near Toronto.
The tax only applies to individuals who are not citizens or permanent residents of Canada. The specific region involved is known as the Greater Golden Horseshoe region, shown below.
For more information, visit the official government website.
Since March 19, 2019 (as part of Budget 2019), the Home Buyers’ Plan will allow first-time home buyers to withdraw up to $35,000 tax-free from their registered retirement savings plan (RRSP) to buy or build a home. The amount must be repaid over a period of 15 years.
This is a recent increase over the current limit of $25,000, to take effect after the approval of Budget 2019.
You must meet the following criteria to qualify for the Home Buyers’ Plan:
If you have a disability, the last requirement is waived. Additional requirements may apply in special cases.
The withdrawal limit is per-person. Each spouse/common-law partner has their own, separate withdrawal limit. If you are married or in a common-law relationship, you can therefore withdraw a total of $70,000.
Note that only the person registered as the owner of an RRSP can withdraw from it under the program. Each spouse will need to have their own RRSP account to take advantage of the increased limit.
You must submit a Form T1036 to your financial institution for each withdrawal you wish to make.
You can make an unlimited number of withdrawals within one calendar year up to a total of $35,000. Withdrawals made during January of the following year are also tax-exempt.
You have up to 15 years to repay the amount withdrawn to your RRSP. Repayments start the calendar year after the withdrawal is made. Each year, the Canada Revenue Agency (CRA) will send you a Home Buyers’ Plan statement of account listing your remaining balance and minimum payment.
If you make more than your minimum payment, your later minimum payments will be reduced. You may repay the full loan amount at any time without penalty.
To make a repayment under the Home Buyers’ Plan (HBP), you need to make a contribution to your RRSP and designate a portion of the contribution as an HBP repayment. You may make this designation on line 246 of Schedule 7 when filing your next tax return.
Jessica and her husband want to buy a home in Toronto for $900,000, but only have $80,000 saved for a down payment. Assuming an interest rate of 3%, their monthly payment would normally be $4,036 per month.*
Jessica and her husband each withdraw $35,000 from their own RRSP account. In total, they make a down payment of $150,000, lowering their monthly mortgage payment to $3,649. That’s a savings of $387 per month, or $116,000 over the lifetime of their mortgage.
To repay the loan, they will need to make an annual payment of $4,667 for 15 years. No interest or tax is charged on the RRSP withdrawal.
*Assuming a 5-year fixed term with 25-year amortization.
Nathan purchased a home five years ago with the help of the RRSP Home Buyers’ Plan. He withdrew the maximum of $35,000, and has made the minimum $2,333 annual payment each year.
This year, however, Nathan can only afford to make a payment of $1,000. The missing $1,333 is filed as taxable income on his next return. Since his remaining balance is now larger than planned, his minimum payment increases to $2,481 starting next year. No other fees or penalties are charged.
To determine if you can save at a lower mortgage rate, use our calculator to compare the monthly interest savings against the cost to refinance. As most mortgage brokers and lenders will cover your legal costs if you are just transferring your mortgage which means no equity take out, the only cost you need to worry about is your mortgage break penalty. This penalty is charged by your lender for breaking your mortgage contract early and is based on your original contract date and current mortgage balance and rate.
If you’re considering a refinance to access home equity, you’re not alone. According to the Canadian Association of Mortgage Professionals, last year 10% of Canadian mortgage holders accessed an average $49,000 of equity from their homes. The large majority of this equity was used for debt consolidation or home renovation. If refinancing for equity, the first thing you want to determine is the maximum amount of equity you can access. In Canada, mortgage holders can access a maximum of 80% of their homes value less any outstanding mortgage balance. Unfortunately accessing this equity comes at a cost – your lender will change you a penalty for breaking your mortgage early. If you’re refinancing in a falling interest rate environment, you may be able to take advantage of interest savings as a bonus.
The amortization period is the total length of time over which you plan to pay off your mortgage.
While we cannot give advice for your specific situation, here are some general guidelines:
The term of your mortgage is the length of time for which you sign a legal agreement with your lender. For the length of the term, you are obligated to their conditions and penalties.
The most common term length in Canada is 5 years. Unless you have specific concerns, a 5-year term generally works well. Each lender will offer different options for term length and rates; contact your lender for more details.
For professional help with determining which term is right for you, please .
At the end of each term, you have the option to renew or refinance your mortgage.
The interest rate determines how much interest is added to the unpaid portion of your mortgage loan.
A higher interest rate can significantly increase your monthly or bi-weekly payment, as well as inflate the term and lifetime cost of your mortgage. Conversely, a lower interest rate can save you tens of thousands of dollars over time.
Your variable interest rate is directly controlled by your lender via their prime rate. Each lender can choose to increase or decrease their own prime rate, in turn increasing or decreasing your variable interest rate.
Lenders will usually adjust their prime rate to reflect changes in the Bank of Canada’s Policy Interest Rate. This means that lenders will tend to have similar or identical prime rates. All major Canadian banks currently have a prime rate of 3.95%.
Getting the lowest rate isn’t always the best option – If you want to become mortgage free sooner then the All in One Mortgage Solution from Citadel Mortgages may be best for you.
As we always hear, your money should never sit around. In fact, your money should always be working for you! What does this mean, though?
For years the banks have taught us we need to keep our debts including our mortgage separate from our savings, income, and investments, but why? Think about if you have a checking account that has a line of credit attached to it and regular savings account at the bank and you go to deposit your money into the bank. Which account will the bank choose to put the money in? (Hint it is never the account with the line of credit.) The banks have always wanted us to keep our debt high to make interest, but the secret is to have our money work for us, not the bank!
Traditional banking keeps what you have (your earnings, savings, short-term investments, etc.) separate from what you owe (your mortgage, loans, credit cards etc.). By doing this, you earn a lower rate of interest on your deposits and savings while paying a higher rate of interest on what you borrow, which are your debts like your mortgage and credit cards. This keeps you in debt longer and paying more interest over time, making it harder for you to retire at a decent age!
However, what if your deposits and your borrowing were combined into a single account so that every dollar you earned automatically went towards paying down your debt? That’s exactly what the All in One Mortgage Solution provides! It brings your mortgage, savings, and income together to help you: save thousands in interest; be debt-free years sooner; enjoy financial flexibility; and simplify your everyday banking. This mortgage product is also calculated daily with interest rather than the standard way of semi-annually, because the interest is calculated daily this offers significant savings over a traditional mortgage. With the All in One Mortgage Solution, every dollar you deposit goes towards paying off your debt, every day
The payment frequency determines how often you will make mortgage payments.
While we cannot give advice for your specific situation, here are some general guidelines:
Mortgage default insurance, also known as Canada Mortgage and Housing Corporation (CMHC) Insurance, protects your mortgage lender in the case of default.
Under Office of the Superintendent of Financial Institutions (OSFI) regulations, you are required to purchase CMHC insurance if your down payment is below 20%.
You may be ineligible for CMHC insurance if:
In these cases, you must make a down payment of 20% or higher.
Your CMHC insurance cost is calculated as a percentage of your purchase price. The exact percentage depends on your down payment amount, and decreases for larger down payments.
Since March 17, 2017, the following CMHC premiums apply in most situations:
| Down Payment (% of Purchase Price) | 5–9.99% | 10–14.99% | 15–19.99% |
|---|---|---|---|
| CMHC Insurance (% of Mortgage Amount) | 4.00% | 3.10% | 2.80% |
Your lender is actually the party responsible for paying CMHC insurance costs. In the majority of cases, your lender will pass these costs down to you by adding the CMHC insurance premium to your mortgage loan amount. This will slightly increase your monthly or bi-weekly payment.
In some cases, your lender may allow you to pay CMHC insurance costs as a lump-sum, or not pass down the cost to you at all. Contact your lender for more details.
A mortgage with a down payment below 20% is known as a high-ratio mortgage. The term ratio refers to the size of your mortgage loan amount as a percentage of your total purchase price.
All high-ratio mortgages require the purchase of CMHC insurance, since they generally carry a higher risk of default.
• Current Mortgage Information Statement – Must be dated same month as your application form, if you do not have one you can contact your mortgage lender and request one to be sent to you by email.
• Most recent property tax statement – If you do not have this, then you can get the most updated statement from your local city hall.
• Most recent NOA
• Job Letter and most recent paystubs
• Last 2 Years T4s
• If Self employed need the following:-
• Master business license or articles of incorporation
• 6 months bank statements
• Last 2 Years T1s – may be required
• Other documents may be required
An “open-term mortgage” is an appealing option to those who plan on paying off their mortgage sooner rather than later. This type of mortgage can be repaid fully or partially at any time without prepayment interest fees. If you want to convert them to another term, you can do so at anytime again without prepayment interest fees. The interest rates for open mortgages tend to be higher than those of closed mortgages because they have such flexibility and options for you as a client. Keep in mind these types of mortgages may have other fees involved as well, so it is best to talk to one of our mortgage agents to ensure you understand all the terms!
A “closed-term mortgage” is the most common choice for people who aren’t planning to pay off their mortgage in the near future. The interest rates for closed term mortgages tend to be lower than that of open mortgages. With closed term mortgages, you’re able to save on interest costs, and hopefully, this will help you to pay your mortgage back faster. Fixed or variable options are available for closed term mortgages, but there’s a restriction on the principal amount that you can pay towards our mortgage each year.
If you want to renegotiate your rate, you will need to pay a prepayment charge. Also, you will need to pay this prepayment charge, if you wish to pay off the balance of your mortgage before the end of the term or if you want to prepay more money than your mortgage will allow you to.Also there are some closed mortgages that you are not allowed to pay off the mortgage at all until end of term which can make it hard to do refinancing in the future, again these are common terms that can cost thousand of dollars in the future and it is best to ask one of our mortgage agents to assist you in obtaining your mortgage so we can explain all the terms to ensure a smooth mortgage transaction.
With prepayment charges, you have the flexibility to increase your monthly payments or to pay the whole thing off. Contact our team of mortgage agents to find out more about your prepayment options.
More than 50% of Canadians have fixed mortgage rates, which means the monthly payment stays the same over the full term. You are protected against fluctuating interest rates so that it can set up and you don’t have to worry about it. If you want stability – this may be the best option for you, but we have to look at your complete financial picture to ensure this.
With a variable mortgage, your rates are typically lower, but they will vary over the term. Your payments will be based on market behavior, and this will affect how much you are paying. The amount that you are paying will change over time but can also reduce the amount of interest you pay over your mortgage term or even help you pay off your mortgage faster.
This calculator is provided for general information purposes only. Yourmortgagecalculators.ca does not guarantee the accuracy of amounts shown, and is not responsible for any consequences of the use of the calculator.
Yourmortgagecalculators.ca does not guarantee the accuracy of the mortgage rates shown online. Yourmortgagecalculators.ca is not a mortgage brokerage or involved in any mortgage lending, we refer our clients to Citadel Mortgages that is a licensed mortgage brokerage. *Rates shown are on approved credit and subject to change without notice.
Please note borrower subject to credit and underwriting approval. Not all borrowers will be approved for conventional financing or equity financing. Receipt of borrower’s application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, Annual APR is subject to approval and underwriting, APR includes all fees and rate which is calculated on a yearly term. APR varies contact us for current rates or more information on a specific product. OAC
All mortgages provided by Citadel Mortgages – FRSA 12993