Everything you need to know about mortgages in Canada 

A mortgage is a type of loan used when purchasing a home. A mortgage is often for a large sum of money.  

In general, a mortgage is a contract between you and the company or person who is lending you money. This contract will include all details of the loan Opens in a new window. and the secured property. This means that the lender may have a legal right to take your property and may do so, if you disregard the conditions of your mortgage.  

The length of time your mortgage contract is in effect is known as the mortgage term, which can range from months to years, and it will include the interest rate.  

It’s important to maintain your home and make all payments on time.  

What should you do before shopping around for a mortgage?  

Let’s start with your credit report. Order a copy of your credit report and make sure there are zero errors because potential lenders will want access to it. 

A good credit score can lead to a decent mortgage size. However, a bad credit score can negatively impact your ability to obtain a loan. In fact, if you have a bad credit score, a mortgage lender may refuse to approve your mortgage, approve it at a lower amount or force a higher interest rate. They might even request a co-signer or demand a large down payment. Learn about your credit report and how to build credit history. 

You’ll need to consider your budget and stay within it to qualify for a mortgage Opens in a new window.. When you’re applying, you’ll have to provide evidence that you can afford these payments. In order to calculate your housing expenses and debt load, mortgage lenders will often review the following information: 

• Your credit report and score 
• Any debt you have 
• Your expenses
• Your income
• The time it will take you to pay off the mortgage in full

In addition, you’ll need to have funds available for closing costs, moving costs and ongoing maintenance costs. 

Find out how much you pre-qualify for using our pre-qualification tool Opens a new window.. Alternatively, speak to a CIBC Mortgage Advisor by calling 1-866-525-8622 Opens your phone app.

There are a few key differences Opens in a new window. between mortgage lenders and mortgage brokers.  

Lenders will lend money directly to you. You can apply for a mortgage from a variety of lenders such as mortgage companies, insurance companies, banks, credit unions, trust companies and loan companies. Every lender will offer its own conditions and interest rates for similar products, so it’s important to shop around for the right one.  

Brokers won’t lend money directly to you. Instead, they’ll find a lender for you. Brokers have a wider range of lenders and products available to them, so they can offer a broader range of mortgage options. Since every broker works with different lenders, ask which ones they work with when you’re comparing options. It’s worth noting that brokers don’t typically charge a fee for their services because they’re paid a commission from the lender. 

Before you begin house hunting, you’ll need to know how much you can afford to borrow. That's where pre-qualification comes in, which helps you determine how much you can borrow based on your income, debts and other financial factors. You’ll want to get pre-qualified so you can have a better picture of what you can afford and don’t waste time falling in love with a property that's way out of your budget. Find out how much you pre-qualify by using our pre-qualification tool Opens a new window..

When you’re ready to buy a home, get pre-approved with CIBC to lock in your rate and shop for a home with confidence. This will pre-approve you for a maximum amount you can qualify for, so you can shop for a home with confidence. Pre-approval differs from pre-qualification in that it is used when you're ready to buy. The process provides you with a mortgage pre-approval certificate, which you can use to shop for and put an offer on your dream home. A pre-approval doesn't guarantee final approval and is subject to conditions stated on the pre-approval certificate. With a pre-approval, you can lock in your rate, so if your mortgage interest rates go up, you're protected for the rate hold period. The process involves a credit check, which may impact your credit score. Talk to a CIBC Mortgage Advisor who can provide expert guidance around all your mortgage-related needs. 

Request a call

Call us: 1-866-525-8622 Opens your phone app.

Your mortgage options can impact your interest rates Opens in a new window.. Since mortgages are typically a large amount of money, any small difference in the interest rate can considerably affect your payments. Canadians can choose between two mortgage interest rate types: 

• Fixed Mortgage Rate locks you into a fixed mortgage payment term, often lasting for five years at a time. 
• Variable Mortgage Rate is tied to the lender’s prime rate and can increase or decrease during your term.  

Essentially, the lower your interest rate, the less you have to pay back.