What is mortgage default insurance, and when do I need it?
In Ontario, if your down payment is less than 20%, you’re required to get mortgage default insurance, which protects the lender if you default. This insurance is mandatory for high-ratio mortgages
What are closing costs, and how much should I budget for them?
You should budget a minimum of 1.5% – 2.5% in closing costs in Ontario of the home’s purchase price. These include legal fees, land transfer tax, title insurance, and other administrative costs
How much can I borrow for a mortgage in Ontario?
Your borrowing capacity depends on your income and debts. Typically, lenders follow the GDS (Gross Debt Service) ratio of 32% for housing costs and a TDS (Total Debt Service) ratio of 40% for all debts, however – based on individual circumstances there may be additional options for borrowers.
What is the Ontario Land Transfer Tax, and do first-time buyers get a rebate?
The Ontario Land Transfer Tax is paid when you purchase property in Ontario. First-time homebuyers are eligible for a rebate of up to $4,000. If you buy a property in Toronto, there is a second Land Transfer Tax, at the municipal level,
What’s the difference between a fixed and variable mortgage rate?
Fixed-rate mortgage locks in your rate for the term, providing stability, while a variable-rate fluctuates based on the lender’s prime rate, which could result in savings if interest rates decrease. Your choice depends on risk tolerance & individual circumstances.
How does the mortgage approval process work in Ontario?
The mortgage approval process involves getting pre-qualified, where lenders assess your credit, income, and debt. Afterward, a pre-approval provides a more formal commitment with a loan amount and rate based on these factors
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