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Mortgage Renewal
Why It's Just As Important As Your First Home Purchase
Mortgage renewal is just as crucial as when you first bought your home. If you’re not careful at renewal, any savings you achieved initially could be wiped out. It’s easy to feel disenchanted with the renewal process, but that’s not in your best interests financially.
Let’s face it, your last mortgage term likely cost you thousands in interest. That’s the reality when we’re talking about home loans. But the goal isn’t to keep paying interest indefinitely – it’s to get to free and clear homeownership.
So, what do you do?
You need a mortgage broker who can consistently offer competitive rates at every renewal – without the hassle. There are certain lenders (who shall remain nameless) that never offer their best rates at renewal. If you find a better deal elsewhere, they’ll often say, “Oh, we’ll match it.” But why settle for a lender who didn’t offer you the best rate in the first place? Do you want that kind of lender handling your largest asset and debt?
What if I am just looking for rates?
If you're only after general rates for comparison, lots of rates are posted online, that's where I would refer you. My service is for clients working with us. The terms behind those rates are often unknown, but will provide you with a general indication.
Looking for Specific Rates That Apply to You?
No problem! Please complete an application (you’ll find the link at the top). The days of one-size-fits-all rates are long gone. With the introduction of the stress test, lenders now break down rates based on many factors: program, down payment, credit score, whether you have a standard or collateral charge on your title, and even how long you need the term.
This is why an application is needed – it helps us determine your exact eligibility and provides rate options tailored to you up front.
The Right Broker for Your Needs
The lenders I work with, my fast service, and my experience are all designed for clients who are looking for ongoing guidance.
Click below to start your application and let's make your renewal and future renewals get you to free and clear home ownership.
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How Much Down Payment Do You Need to Buy a Home?5% down on the first $500,000 of the home’s price. ✔️ 10% down on any amount above $500,000. For example, if you're purchasing a $600,000 home: 5% on the first $500,000 = $25,000 10% on the remaining $100,000 = $10,000 Total down payment = $35,000
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Can Your Down Payment Be Gifted?Yes, but typically only from an immediate family member (Mom, Dad, or siblings). An exception can be considered for a common-law spouse and Aunt, Uncle or Foster Parent. ✔️ The lender requires a completed gift letter (which we provide). ✔️ You must show proof of deposit into your bank account.
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Can You Borrow Your Down Payment?Yes, in some cases. Some lenders allow a borrowed down payment, but it depends on your financial situation and creditworthiness. ✔️ The borrowed funds must come from a loan, line of credit, or another source that does not increase your debt load beyond lender guidelines. ✔️ You must prove you can afford the additional debt payment on top of your mortgage payments. Not all lenders allow this, so it’s important to check your options. Let me know if you'd like more details! 😊
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Can Your Down Payment Come from Your RRSP?Yes! Through the Home Buyers' Plan (HBP), first-time homebuyers can withdraw up to $35,000 from their RRSP tax-free to use as a down payment. ✔️ You must repay the withdrawn amount within 15 years, starting the 5th year after withdrawal. ✔️ This can be a great way to use your savings without immediate tax implications.
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When Should You Apply for Mortgage Pre-Approval?As soon as possible! If buying a home is a goal—now or in the future—applying for pre-approval early helps you: ✅ Understand your borrowing power ✅ Identify any financial adjustments needed ✅ Lock in an interest rate for up to 120 days ✅ Be ready to act fast when you find the right home Planning ahead ensures you’re in the best position to buy when the time is right!
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How Do Mortgage Brokers Get Paid?✔️ The lender pays the broker—not you! ✔️ Compensation is based on the mortgage amount and term (longer terms typically pay more). ✔️ A fair estimate of commission is around 1% of the mortgage amount—sometimes more, sometimes less. ✔️ Brokerage fees are also paid to TMG, a company I’m proud to be associated with!
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What is a Mortgage Default Insurer?In Canada, if your down payment is less than 20%, you are required to purchase mortgage default insurance from one of the three insurers: ✔ CMHC (Canada Mortgage and Housing Corporation) ✔ Sagen ✔ Canada Guaranty 🔹 This insurance protects the lender—not the borrower—but allows buyers to purchase a home with as little as 5% down. 🔹 The cost is a one-time premium that gets added to your mortgage, so you don’t need to pay it upfront. I always say we have a love-hate relationship with the insurers—we may not love paying them, but they help buyers enter the market with a lower down payment!
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What Are Lending "Servicing Ratios"?Servicing ratios are key numbers in your mortgage application that determine how much mortgage you qualify for. There are two main ratios: ✔ GDS (Gross Debt Service) – Measures your ability to afford just the home, including: Mortgage payment Property taxes Heating costs Condo fees (if applicable) ✔ TDS (Total Debt Service) – Measures your ability to afford the home plus any other debts, including: Credit cards Car loans Student loans Other monthly obligations 🔹 Your maximum allowed ratios depend on your credit score, down payment, and the mortgage program you're applying for. Both ratios must be within the lender's limits to get approved.
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What is the "Benchmark AKA Stress Test Rate"?In 2016, the Canadian government introduced the Benchmark Rate (Stress Test Rate) as part of mortgage qualifying rules. ✔️ It’s higher than your actual mortgage rate and is used only to qualify you. ✔️ Ensures you can still afford your mortgage if rates increase in the future. ✔️ You must qualify at the higher of: The current stress test rate (set by the government). Your actual mortgage rate + 2%. This rule helps prevent overborrowing and protects homeowners from potential financial strain if rates rise.
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What is Mortgage Term vs. Amortization?Mortgage Term – The length of time your mortgage contract (rate, lender, and conditions) is in effect. Common terms: 1 to 5 years (5 years being the most popular). At the end of the term, you renew or switch lenders. ✔ Amortization – The total length of time it takes to fully pay off your mortgage. Common amortization periods: 25 years (standard) or 30 years (for some qualified buyers). The longer the amortization, the lower the payments but more interest paid over time. Think of term as a short chapter in your mortgage journey, while amortization is the entire book!
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What Is a Mortgage Lender Looking For?Stability. Lenders want to see that you have a stable financial history, including: Steady income & employment (consistent job history) Responsible money management (savings & budgeting) Good credit habits (on-time payments, low debt levels) Healthy qualifying ratios (you can comfortably afford the home + debts) At the end of the day, the lender wants their money back, so they look for low-risk borrowers who show financial reliability.
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What Credit Rating Do You Need for a Mortgage?Aim for at least 680 – This is considered an "OK-Good" score and makes approval easier. ✔ 650 is the minimum in most cases, but lenders & insurers have stricter guidelines below 680. ✔ Credit scores range up to 900, and I can provide tips to improve your score if needed—part of the planning process I help with!
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What If I Have Bad Credit or a Bankruptcy? Can I Apply?If you have outstanding collections → Pay them off first. Lenders won’t approve a mortgage if unpaid collections exist. ✔ Bankruptcy or Orderly Payment of Debt (OPD)? You must be 2 years discharged. You need 2 years of re-established, perfect credit after discharge. ✔ “B” Lenders – An Alternative Option More flexible with lower credit scores, bankruptcy history, or self-employment. Higher cost: ~3% more in interest + 1% fee added to mortgage. Requires at least 20% down (sometimes more). Good strategy: Use a B lender for a 2-year term to rebuild credit, then switch to a traditional lender for better rates. Bad credit doesn’t mean no options—it just means a little more planning!
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How Long Is a Credit Report Good for When Applying for a Mortgage?Standard validity: 30 days – Lenders require a credit report less than 30 days old when submitting an application. ✔ Why? Credit updates monthly, so lenders need the most recent info. ✔ You’ll need a credit check for pre-approval and may need another refresh when you find your home. ✔ Brokers can use one credit report for multiple lenders, avoiding multiple checks. ✔ Once approved, the 30-day rule no longer applies, but lenders can recheck your credit anytime before closing.
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I’ve Never Missed a Payment, But My Credit Score Is Low—Why?Two common reasons: ✔ High Credit Utilization – If you're using over 75% of your credit limit, your score takes a hit. Example: On a $5,000 limit, try to stay under $3,750 at all times. ✔ Too Many Credit Checks (Hard Inquiries) – Frequent credit pulls lower your score. Car Shopping? Pick your car before allowing dealerships to run credit (they often check multiple lenders at once). Your score isn’t just about paying on time—how you use credit also matters!
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How Long Are Mortgage Pre-Approvals Good For?Credit Reports: Must be less than 30 days old when submitted to a lender. ✔ Pre-Approval Validity: As long as nothing changes that could negatively impact your application (income, credit, debt, etc.), it remains valid. ✔ Documents: Some documents (like pay stubs or bank statements) may need to be refreshed if too much time passes. Essentially, as long as your financial situation stays the same, your pre-approval holds!
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Do I Really Need Life and Disability Insurance for My Home?Yes, yes, you do. You wouldn't drive your car without insurance, right? Now compare the cost of your car to your home. It shouldn’t even be a question. Is It Mandatory? No—but it should be. I Have Disability Insurance at Work—Isn’t That Enough? Most workplace disability plans cover only 60% of your income. Can you afford to cover the missing 40% out of pocket? How long would your savings last? What Happens If One Homeowner Passes Away? If two people own a home together: Land titles automatically transfer to the surviving owner. The mortgage does not. The surviving owner must requalify for the mortgage alone—or sell. Is Private Life Insurance Better? Yes, in many cases. A private life insurance policy keeps its full value. Mortgage life insurance decreases as the mortgage is paid off, but premiums stay the same. Private insurance can often be cheaper. The Catch? Disability insurance is almost always cheaper through the mortgage. Many lenders only allow you to pick either life insurance or both life and disability—NOT disability alone. I Have Life Insurance at Work—Isn’t That Enough? Do you get to keep it if you leave your job? No. When you apply for new insurance later, you’re older—and premiums will be higher. The longer you wait, the more expensive it gets. (Tough love, but true.) I’m Single with No Kids—Do I Really Need This? Yes. Disability insurance: If you can’t work, who pays the mortgage? Life insurance: If something happens to you, who handles your home, bills, and estate? It often falls on a grieving parent—who may also have to sell your belongings. Make it easier on them. What’s the Best Approach? 1️⃣ Take the mortgage insurance for immediate coverage. 2️⃣ Get private insurance quotes. Setting up private insurance takes time. 3️⃣ If you find a better private plan, cancel the mortgage insurance anytime. Bottom line? Be covered. Please.
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Going Through a Separation? Need to Buy Out the Other Owner?Yes, there are options! You can reborrow up to 95% of the home’s value—essentially starting over with just 5% down—to buy out the other owner (OAC). See our Spousal Buyout Page for more details.
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Unexpected Bill at the Lawyers? Here’s Why!If your friend faced a $3,000 surprise bill at the lawyer’s office, it was most likely a property tax adjustment. We review this with every client before they choose a lender, so there are no surprises when closing. Unfortunately, this happens far too often for people —but not with us!
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Breaking Your Mortgage: What You Need to KnowIf you need to break your mortgage term, your options typically are: ✅ Port the mortgage to a new home (if eligible). ✅ Pay a breakage penalty. Fixed-Rate Mortgage Penalty Your penalty is the higher of: 🔹Three months’ interest (common in the last year of your term). 🔹 Interest Rate Differential (IRD) – This covers the lender’s lost interest, which is why some penalties hit $20,000+! Variable-Rate Mortgage Penalty 🔹 Usually just three months’ interest, making it more manageable. 💡 Pro tip: IRD penalties vary by lender, so choosing the right lender matters! Let’s review your options before you commit.
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Why Do I Still Get Charged a Penalty If I Stay With My Lender?Mortgage money is sold on the secondary market, meaning lenders have financial obligations beyond just your loan. Your mortgage contract is a legally binding agreement based on the rate and term you selected. Now, let’s flip the script: 🔹 Imagine you locked in a 5-year fixed rate with ABC Lender. 🔹 Two years later, rates go up—and your lender calls to increase your rate. ❌ Not happening! You’d be calling a lawyer, right? That’s why penalties exist—they protect both you and the lender. What’s the Alternative? When possible, porting your mortgage to a new home can help you avoid penalties. Let’s review if this option works for you!
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What Does It Mean to Port a Mortgage?Porting means moving your current mortgage—including its rate and terms—from your existing home to a new home without breaking your contract. This helps you avoid penalties, but you must re-qualify to port. Why Doesn't Everyone Just Port If It Saves the Penalty? 1️⃣ Amortization Limits: Most lenders require you to keep the same amortization. If you only have 15 years left, you can’t reset to 25 years on the new home. This means higher payments, making it harder to qualify. 2️⃣ Locking in a New Term: If rates are rising, some homeowners prefer to break their mortgage to secure a longer, stable term. 3️⃣ Lender Porting Rules: Some lenders have strict timing requirements between closings. If you can’t close within their timeframe, porting may not be an option. 🚧 Other Restrictions: You CANNOT port into a construction draw mortgage. If you're considering porting, let's review your specific situation to see if it makes sense!
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