Last Updated: June, 2020

Mortgage Loans Canada

A mortgage is a loan to buy real estate. A financial institution most often provides it.

The collateral or security is the property itself. 

If you do not make your mortgage payments, your financial institution may take possession of your home. They will sell it to recover the money owing.

Unless you can afford to pay for a home in cash, you will likely need a mortgage when buying a home in Canada.


Although your financial institution puts up most of the money for the home, you will still need to put some money down. You will need to put down at least five percent, depending on the price.

When you are looking for a mortgage, it is easy to focus solely on the mortgage rate. While the mortgage rate certainly matters, there are other important factors to consider.

Do you want a fixed or variable rate mortgage? Like a personal loan, with a fixed-rate mortgage, your mortgage rate stays the same during your mortgage term. This is different from a variable rate, where your mortgage rate can change.

If your goal is to be mortgage-free sooner rather than later, you will want a mortgage with generous prepayment privileges. Most lenders let you increase your mortgage payment and make lump-sum payments on your mortgage without penalty.

If there is a good chance you could move during your mortgage term, you will want a portable mortgage. Portable means you can take the mortgage with you without paying a costly mortgage penalty.

Speaking of costly mortgage penalties, this is something to beware of when signing up for a mortgage. Not all mortgage lenders calculate their mortgage penalties the same way.

Be sure to ask about mortgage penalties before signing up, so you are not blindsided.

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