Mortgage FAQ
Frequently Asked Questions
Honest answers to the questions Calgary homebuyers and homeowners ask most.
Getting Started
How do I start the mortgage process in Calgary?
Start with a free consultation. Jay reviews your income, credit, savings, and goals to determine your buying power. From there, you get pre-approved with a rate hold of up to 120 days so you can shop with confidence.
What credit score do I need to buy a home in Canada?
Most A-lenders require a minimum credit score of 680 for insured mortgages. B-lenders work with scores of 500-650, and private lenders focus more on property equity than credit scores. Jay reviews your full profile to find the right lender.
How much down payment do I need for a house in Calgary?
The minimum is 5% for homes up to $500,000. For homes between $500,000 and $1,499,999, it is 5% on the first $500K and 10% on the remainder. Homes at $1.5 million or above require 20% down. Investment properties always require 20% minimum.
What is the mortgage stress test in Canada?
All federally regulated lenders must qualify you at the higher of your contract rate plus 2% or 5.25%. This ensures you can handle rate increases. For example, if your rate is 4.5%, you must qualify at 6.5%.
Rates & Payments
Should I choose a fixed or variable mortgage rate?
Fixed rates offer payment certainty for the entire term. Variable rates historically cost less over time but fluctuate with the Bank of Canada rate. The right choice depends on your risk tolerance and financial stability. Jay provides personalized advice.
How much are closing costs for buying a home in Calgary?
Budget 1.5-2.5% of the purchase price. This includes legal fees ($1,200-$2,000), home inspection ($400-$600), title insurance ($250-$400), and property tax adjustments. Alberta has no provincial land transfer tax, saving you thousands.
Can I negotiate my mortgage rate?
Yes. Banks have discretion on rate discounts. Working with a broker gives you leverage — Jay presents competing offers from 60+ lenders, which often motivates lenders to offer their most competitive rates.
First-Time Buyers
What is the FHSA and how does it help first-time buyers?
The First Home Savings Account lets first-time buyers contribute up to $8,000/year (lifetime max $40,000). Contributions are tax-deductible and withdrawals for a qualifying home purchase are tax-free. It can be combined with the Home Buyers' Plan.
Can I use my RRSP for a down payment?
Yes. The Home Buyers' Plan allows first-time buyers to withdraw up to $60,000 from their RRSP tax-free for a home purchase. If buying with a partner, you can each withdraw $60,000 for a combined $120,000. Repayment begins in the second year.
Are 30-year amortizations available for first-time buyers?
Yes. As of December 2024, first-time buyers purchasing new-build properties can access 30-year amortizations with insured mortgages, lowering monthly payments compared to the standard 25-year amortization.
Renewals & Refinancing
Should I accept my bank's renewal offer?
Usually not without shopping it first. Banks often send renewal offers at posted rates, which are rarely the best available. Jay compares 60+ lenders and can often find significant savings. Even if you stay with your bank, a competing offer gives you leverage.
How much does it cost to break a mortgage early?
For variable-rate mortgages, the penalty is typically 3 months' interest. For fixed-rate, it is the greater of 3 months' interest or the Interest Rate Differential (IRD), which can range from a few thousand to $15,000+. Jay calculates your exact penalty before recommending action.
Can I refinance to consolidate debt in Calgary?
Yes, if you have sufficient equity. You can refinance up to 80% of your home's appraised value. Consolidating 20%+ credit card debt into a 5-6% mortgage rate can save hundreds per month.
Self-Employed & Non-Traditional Income
Can I get a mortgage if I write off most of my business income?
Yes. Stated income programs allow self-employed borrowers to qualify based on a reasonable declared income for their industry, rather than tax returns alone. You typically need 10-20% down and 2 years of business history.
How long do I need to be self-employed to get a mortgage?
Most lenders require 2 years minimum, verified by business licence, CRA registration, or articles of incorporation. Some alternative lenders may consider 1 year with strong compensating factors.
Bad Credit & Special Situations
Can I get a mortgage with bad credit in Calgary?
Yes. B-lenders work with scores of 500-650, and private lenders focus on property equity rather than credit score. Jay works with 25+ alternative lenders to find approval paths for borrowers with bruised credit.
Can I buy a house with a consumer proposal?
Yes. Some lenders approve mortgages for borrowers with active consumer proposals, provided you have at least 12 months of on-time payments, stable income, and 10-15% down payment. More options open up after discharge.
Can newcomers to Canada get a mortgage?
Yes. Many lenders offer new-to-Canada programs for permanent residents and work permit holders. These programs allow for limited Canadian credit history and require as little as 5-10% down payment.
Investment Properties
How much down payment do I need for a rental property?
A minimum of 20% is required for investment properties in Canada. Some lenders require 25% for multi-unit properties or borrowers with existing rental portfolios.
Can I use rental income to qualify for an investment mortgage?
Yes. Most lenders allow 50-80% of gross rental income to offset carrying costs. Some investor-friendly lenders use more favourable calculations. Jay targets these lenders to maximize your qualification room.
Still Have Questions?
Every mortgage situation is different. Book a free consultation with Jay to get answers specific to your situation.