Key 10 questions to ask when getting a mortgage in Canada in 2026

Updated by Aya Al-Hakim on June 25, 2026 | Originally written by Hayley Vesh on June 6, 2024.

Getting a mortgage is a major financial commitment, and likely the largest loan you’ll ever take on. Choosing the right professional and asking the most relevant questions upfront is critical to secure the best mortgage rates, terms, and overall experience. 

Whether you work with a bank (direct lender) or a mortgage broker, understanding how mortgages work in Canada, from fees and rates to prepayment penalties and closing costs, can save you thousands over time. 

A direct lender offers its own mortgage products and handles your application in-house, while a mortgage broker shops across multiple lenders to find competitive rates and flexible terms on your behalf. Both options have advantages, but the right fit depends on your financial situation and goals. 

You’ll likely have far more than 10 questions, but don’t hesitate to ask every single one of them. The more you know, the more prepared you will be for this important transaction.

1. What fees will I pay for a mortgage in Canada?  

You may pay lender fees, closing costs, and, in some cases, broker fees when getting a mortgage in Canada.

Direct lenders may charge origination or administrative fees for processing your mortgage application. They also earn interest on the loan and may charge additional fees, such as late payment penalties.

Mortgage brokers are typically free for borrowers to use. Lenders usually pay brokers' commissions after the mortgage closes. However, some brokered mortgages may involve fees in certain situations, such as private lending arrangements.

Learn more: Should you get your mortgage using a broker or a bank? 

2. How much mortgage can I get pre-approved for?  

The amount you can get pre-approved for depends on your income, debts, credit profile, down payment, and other financial factors.

A mortgage pre-approval is an estimate of the maximum amount a lender may be willing to lend to you. Getting pre-approved before house hunting can help you establish a realistic budget and narrow your home search.

That said, just because you qualify for a certain amount doesn’t mean you should spend all of it. Calculate your monthly or biweekly mortgage payments and determine whether the amount is affordable and fits comfortably within your lifestyle and long-term financial goals.

Keep in mind that a pre-approval is not a guarantee of financing. Including a financing condition in your purchase offer can help protect you if your mortgage application is ultimately declined.

If you waive the financing condition and your mortgage approval falls through, you could lose the deposit on your purchase offer and potentially face legal action from the seller.

3. Should I choose a fixed or variable mortgage rate?  

Choose a fixed-rate mortgage if you value predictable payments, but a variable-rate mortgage if you're comfortable with interest rate fluctuations in exchange for potential savings.

A fixed-rate mortgage locks in your interest rate for the length of the term, providing payment stability and protection from rising rates. However, breaking a fixed mortgage before the term ends often results in higher prepayment penalties. The penalty amount compensates a lender for interest it expected to collect over remainder of the term.

A variable-rate mortgage moves with changes in interest rates. Borrowing costs can rise or fall over time depending on the Bank of Canada's (BoC) overnight lending rate. While this option carries more uncertainty, prepayment penalties are usually lower than fixed-rate prepayment fees and often limited to three months' interest.

Comparison:

Related: The rate debate: whether you should go with a fixed or variable mortgage 

4. What is the minimum down payment required in Canada?

The minimum down payment in Canada is 5% for homes priced at $500,000 or less, with higher requirements for more expensive properties.

Your down payment is the portion of the home's purchase price that you pay upfront. According to Financial Consumer Agency of Canada, buyers must put down at least 5% on the first $500,000 of a home's purchase price and 10% on the portion above $500,000 and up to $1.5 million. A 20% down payment is required for homes that cost more than $1.5 million.

A down payment of 20% or more qualifies as a conventional mortgage. Anything below 20% is considered a high-ratio mortgage and typically requires mortgage loan insurance as per CMHC guidelines. Mortgage default insurance isn't available for homes priced above $1.5 million.

Minimum down payment by purchase price:

5. When do I need my down payment ready?  

You will typically need a deposit amount shortly after your offer is accepted, while the rest of your down payment is due before closing.

In most cases, buyers provide a deposit—often around 5% of the purchase price—within 24 hours of an accepted offer. The remaining down payment is usually transferred to your lawyer shortly before the closing date.

It's important to have documentation showing where the funds are coming from, whether they are from savings, investments, a gifted down payment, or the Home Buyers' Plan (HBP).

According to the 2026 CMHC Mortgage Consumer Survey, 23% of homebuyers received a financial gift to help fund their down payment, including 27% of first-time buyers.

If you're using gifted funds, your lender will typically require a mortgage gift letter confirming the money does not need to be repaid.

Savings remain the primary source of down payments, with buyers spending an average of 4.4 years building them. Planning ahead can help ensure your funds are accessible when needed.

If you're using the Home Buyers' Plan, remember that RRSP funds must have been in the account for at least 90 days before withdrawal.

Also consider potential delays when obtaining a bank draft, particularly if you use an online-only financial institution without physical branches.

6. What amortization period is right for me?

The right amortization period depends on whether you prefer lower monthly payments or paying off your mortgage faster.

An amortization period is the total length of time needed to repay your mortgage in full. Most borrowers choose an amortization period of around 25 years, although options vary depending on lender policies and borrower qualifications. First-time buyers or purchasers of newly constructed homes can qualify for up to 30-year amortizations.

A shorter amortization period increases your monthly payment but reduces the amount of interest paid over the life of the mortgage. A longer amortization lowers monthly payments but increases total interest costs.

Learn more: How is a mortgage term different from an amortization period? 

7. Which mortgage payment schedule should I choose?  

The best mortgage payment schedule is the one that fits your cash flow while helping you meet your repayment goals.

Most lenders offer monthly, semi-monthly, biweekly, and weekly payment options. Many borrowers choose a schedule that aligns with how they get paid.

Accelerated biweekly payments can help you pay off your mortgage faster because they result in the equivalent of one extra monthly payment each year. This reduces your principal balance faster and can lower your total interest costs over time.

8. What closing costs and additional expenses should I expect?  

Expect closing costs to total roughly 1.5% to 4% of your home's purchase price, depending on the property and location.

These expenses are in addition to your down payment and can include appraisal fees, legal fees, title insurance, land transfer tax, mortgage default insurance, property tax adjustments, and condominium-related fees.

Fortunately, many provinces offer incentives for first-time homebuyers. In Ontario, eligible buyers may qualify for a land transfer tax refund. In Toronto, buyers should also account for the Municipal Land Transfer Tax (MLTT), which can significantly increase closing costs.

9. What are the penalties for breaking a mortgage early?  

Breaking a mortgage before the end of its term typically triggers a prepayment penalty.

The amount you'll pay depends on whether your mortgage has a fixed or variable interest rate. Lenders charge these penalties to recover some of the interest income they lose when a mortgage loan is paid back early.

Variable-rate mortgages generally carry a penalty equal to three months' interest, while fixed-rate mortgages often require the greater of three months' interest or the interest rate differential (IRD).

Penalty comparison:

Example:
If you have a $400,000 mortgage and break it early, a variable-rate penalty might be around $5,000, while a fixed-rate penalty could exceed $15,000 depending on IRD and time remaining in the term.

10. What should I avoid doing before my mortgage closing date?  

Avoid making major financial or employment changes before your mortgage closes.

Lenders may perform final checks before releasing funds, and significant changes could delay your closing or even affect your mortgage approval.

Before your closing date, avoid:

• Closing bank accounts: Lenders may need to verify where your down payment and other funds originated. They often request three to six months of account statements during the mortgage process.
• Changing jobs: Employment income is a key factor in mortgage qualification. While a promotion or raise may strengthen your application, quitting your job, becoming self-employed, or accepting a lower-paying position could create complications.
• Applying for new credit or financing: Taking on additional debt can affect your credit score and increase your debt-service ratios, both of which may raise concerns for your lender.
• Making large unexplained deposits or withdrawals: Significant account activity can trigger additional documentation requests, potentially slowing down the mortgage approval process.

If you keep your finances stable, maintain your employment, and remain transparent with your lender throughout the process, your closing date is more likely to go smoothly.

Read more: The ultimate guide to mortgage closing costs in Canada