What is a Mortgage? A mortgage is basically a very large loan acquired to purchase a house. Generally, this is the largest purchase many Canadians will ever make. Most people obtain mortgages from Canadian banks such as CIBC, BMO, TD, BNS, RBC. (listed in no general order)

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How much can I borrow?

The bank will generally lend you 80 LTV (Loan to value). You must pay the remainder 20% using your own money as the down payment.

Note: When buying a property for personal use you can put as little as 5% down, however, you will pay CMHC fees on anything less than 20% down payment. 

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CMHC fee? This is a commercial mortgage insurance fee. In Ontario, any borrower with less than 20% down on their purchase must be insured against borrower default of the mortgage. This is calculated as a percentage of the loan and is based on the percentage downpayment.Keep in mind this additional percentage of CMHC fee you have to pay when you put less than 20% down gets added to the amortization of your mortgage - so it might cost you, say, around $22/month extra.

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What the bank requires to see from you:
Most current pay stubs, last years NOA , 

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What type of rate do I get?

Fixed rates / Variable rates... 5 year fixed, 10 year fixed?

There are many options available to borrowers. Things to consider are the economy, current interest rates (are they high right now or are they low), etc.

Do what is best for you. Lots of people will tell you their opinions, but when it comes down to it, make sure you understand which one is best for you.

For example - Long term hold in mind when buying this property
                     - Current interest rates are low, but are expected to go higher over the coming years
                     - Variable rates are currently lower... but can change as the banks raise their rates

                     - 5 year fixed is only .2% higher than the variable rate and the bank was able to reduce their advertised fixed rate slightly making it more attractive.
*This made the decision to go with a fixed rate*

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2nd Example - Short term hold in mind

                      - 2 year mortgage is extremely low at a variable rate

                      * This makes most sense as you plan on selling it at the 2 year mark

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3rd example - Fix and flip in mind

                     - Open mortgage a few percentage points higher than the closed rates, however, once the property is fixed and sold we can pay out the mortgage at no extra fees.

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Should you pay your Mortgage Monthly or Bi-Weekly?

Let's take a look at this:

$400,000 mortgage monthly payments 25 yr @ 3% interest = $1,893.00/month

$400,000 mortgage bi-weekly payments 25 yr @ 3% interest =$1,742.00/month

$400,000 mortgage weekly payments 25 yr @ 3% interest = $1,740.00/month

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You'll notice that paying your mortgage weekly or bi-weekly makes the most sense.

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