Frequently Asked Questions (FAQs)

A fixed-rate mortgage locks in your interest rate for the entire term, meaning your payments stay the same. A variable-rate mortgage fluctuates based on the lender’s prime rate, meaning your payment may change if interest rates rise or fall

The minimum down payment depends on the purchase price:

• 5% for homes up to $500,000

• 10% on the portion between $500,000 - $999,999

• 20% for homes $1,000,000 and above

If your down payment is less than 20%, CMHC mortgage default insurance is required.

Most “A” lenders prefer a score of at least 680 for the best rates, but will allow credit scores as low as 600 in particular situations. Alternative lenders (known as ‘B’ lenders) can work with scores as low as 500-550. Your credit score affects your approval, loan-to-value, interest rate, and loan terms.

Your affordability is based on your income, debts, credit score, and down payment. Lenders use two key ratios:

For INSURED Mortgages (less than 20% down payment)

• Gross Debt Service (GDS): No more than 39% of your income should go toward mortgage-related costs.

• Total Debt Service (TDS): No more than 44% of your income should go toward all debts, including your mortgage.

For CONVENTIONAL Mortgages (20%+ Down payment or Equity)

• Gross Debt Service (GDS): With a credit score above 680, most Banks will not even look at the GDS ratio, referring to the TDS ratio instead.

• Total Debt Service (TDS): Depending on credit score, clients employment sector and status, net worth and prospects on bringing other forms of business to the Bank, typically can see an allowance of 45% to 52%

Yes! Self-employed borrowers may need to provide business financials, tax returns, and bank statements to verify income. Better Mortgages specializes in helping self-employed Canadians find the best financing solutions.

Mortgage default insurance (CMHC, Sagen, or Canada Guaranty) is mandatory for down payments under 20%. It protects the lender in case of default and allows borrowers to access lower interest rates with a smaller down payment.

Closing costs typically range from 1.5% to 3% of the home’s purchase price. They include:

• Land Transfer Tax

• Legal Fees

• Home Inspection Fees

• Title Insurance

• Property Tax Adjustments

Yes! A pre-approval locks in your interest rate for up to 120 days and gives you a clear budget for house hunting. However, final approval still depends on a full review of your financials and the property.

The stress test ensures borrowers can afford mortgage payments if rates rise. Lenders qualify you at the higher of your mortgage rate + 2% or the current Bank of Canada benchmark rate.

Yes, but there may be a penalty. For fixed-rate mortgages, penalties are based on an Interest Rate Differential (IRD) calculation or three months’ interest, whichever is more. For variable-rate mortgages, penalties are usually just three months’ interest.

Banks can only offer their own products, while Better Mortgages brokers compare multiple lenders (including banks, credit unions, and alternative lenders) to find the best mortgage solution tailored to your needs.

At Better Mortgages, we are:

• Led by Canada’s top-producing brokers with multiple #1 rankings in the industry.

• Able to access 4 of the Big 6 Banks directly (most brokerages only have direct access to 2 or 3).

• Focused on mentorship and education, ensuring both brokers and clients get the best mortgage strategies.

We simplify the mortgage process, ensuring first-time buyers understand their options. We also help maximize benefits like:

• First-Time Home Buyer Incentive

• RRSP Home Buyers’ Plan

• Land Transfer Tax Rebates

• Best available mortgage rates

Yes! Whether you’re self-employed, an investor, have bruised credit, or need alternative lending options, we specialize in finding mortgage solutions that banks often won’t approve.

No! In most cases, our services are completely free, as we are compensated by the lender. Fees may apply for private lending or highly complex mortgage solutions, but we will always be upfront about any costs.

Yes! If you already have a mortgage but want a better rate or better terms, we can help you switch lenders at renewal or refinance your mortgage for a better deal.

Yes! We have Agents and Brokers who specialize in helping real estate investors structure financing for rental properties, multi-unit buildings, and commercial properties.

It’s simple! You can apply online, book a consultation with one of our expert agents and brokers, or call us directly. We’ll walk you through the process and get you pre-approved quickly.

We are actively looking for prospective high-producing Mortgage Agents and Brokers who want access to:

• Industry-leading mentorship from top-ranked brokers

• More lender access (including 4 of the Big 6 Banks)

• Proven, high-converting marketing materials

• Brokerage promotion via our social media channels

If you’re ready to take your mortgage business to the next level, visit our Careers page to learn more!