Frequently Asked Questions

• Why choose a

  Calgary Mortgage Broker?

  Navigating the world of mortgages can be overwhelming. With a myriad of options and changing market conditions, you need an expert in your corner. As a trusted Calgary Mortgage Broker, we serve as your advocate and advisor, providing valuable insights and support that empower you to make informed decisions.

• How much mortgage can I afford?

  This is different for everyone and depends on your income, credit score, debt and how much you have for a down payment. This information is used to find your Gross Debt Service ratio (GDS) and your Total Debt Service ratio (TDS). A general rule of thumb is that you can borrow approximately four times your annual income, but this will vary based on many different factors. A mortgage broker can help you calculate what you qualify for based on current lending rules.

• How much do I need for a down payment in Calgary?

  In Canada, the minimum down payment is 5% for homes under $500,000. For homes priced between $500,000 and $1,500,000, you’ll need 5% of the first $500,000 and 10% of the remaining amount. For example, a $750,000 home would require a $50,000 minimum down payment. Homes over $1.5 million require a 20% down payment.

  If your down payment is less than 20%, you will be required to purchase mortgage default insurance. This protects the lender in case you default and allows you to buy with a smaller down payment. The insurance is added to your mortgage and increases your payments.

• What credit score do I need to qualify for a mortgage?

  600+ is the minimum credit score required by the national regulator (OSFI) if you’re putting less than 20% down. Most lenders want to see that your credit is a little bit higher than the minimum, but even with a 620 credit score you may be eligible for the best rates on the market.

  Lower credit is usable with some lenders, but they will likely ask for 20% down, offer a higher interest rate, or have stricter conditions.

  Bad credit may be accepted by a B-lender with at least a 20% down payment. A mortgage broker can help you find ways to improve your credit.

• What are the current mortgage rates in Calgary?

  Mortgage rates change frequently and depend on the type of mortgage, your credit, and the lender. Our rates page will show you the best insured mortgage rates available.

  Depending on the mortgage you are looking for, the rate you get might be a little higher. A broker can give you the most up-to-date rates from every lender and help you understand how they apply to your situation.

• What’s the difference between fixed and variable rates?

  A fixed rate stays the same for the full term of the mortgage (usually 5 years). A variable rate fluctuates at a specific discount from the prime rate for your term. Often the interest rate at the beginning of the term is better than a five-year fixed rate but this can change in either direction.

  With most variable rates, your payment will change when the interest rate changes. Some lenders like TD Canada Trust or Royal Bank have steady payments on their variable rate, but this is viewed by the national regulator (OSFI) as an added risk.

• What is a pre-approval and when should I get one?

  A pre-approval typically takes less than 24 hours, gives you an estimate of how much you can borrow and locks in an interest rate for 120 days. It’s best if you get one right before you start house hunting so that you know what price range you should be looking at. The pre-approval doesn’t guarantee that the lender will give you a mortgage, but it strengthens your position when making an offer on a home.

  If there is any concern about your credit or your pre-approval, it’s a good idea to do this early in the process. A pre-approval is good for as long as the situation remains stable. If your application improves or gets worse over time, that will impact the pre-approval. Doing an application early allows us to make sure we deal with any problems well in advance of you finding a home you love.

• What are closing costs and how much are they?

  These are legal fees and other other possible charges such as an inspection, appraisal, and other adjustments.

  In Alberta there is no land transfer tax. If you budget $4000, that is likely enough to cover your closing costs.

  In many other provinces, you may need to add a land transfer tax of 1.5% to 3% of your purchase price.

• What happens if I need to break my mortgage?

  If you need to end your mortgage early you may face a penalty. The cost depends on your lender and whether you have a fixed or variable rate. A broker can help you understand your options and minimize penalties if you need to refinance or sell.

• Is it better to use a mortgage broker or go with my bank?

  A mortgage broker’s whole job is to help you find the best mortgage available from a variety of lenders so that you don’t have to do the leg work. And you don’t even pay the fee – the lender does.

  Your bank may be able to offer you a better rate than the broker can, but the broker may be able to find you an even better deal at a different lender.

• Are there programs to help Calgarians buy a home?

  There are several tools available in Canada to help homebuyers, such as: borrowing money from your RRSP, First Home Savings Accounts, First Time Home Buyers’ Tax Credit, GST new housing rebate, and 30 year mortgages.

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