FAQs

What is the difference between an open and closed mortgage?

With an open mortgage, you can pay off your mortgage whenever you want with no penalty, in exchange for a higher interest rate (compared to a closed mortgage). An open mortgage may be right for you if you plan to sell your property within 12 months or pay off your mortgage quickly.

With a closed mortgage, you will receive a lower interest rate (compared to an open mortgage), but there is a maximum annual amount you can pay towards your mortgage balance without penalty.

What is a high-ratio mortgage and why do I need default insurance?

A high-ratio insured mortgage is a mortgage where you have less than 20% down payment and the value of the property is less than $1 million. In these cases, mortgage default insurance is a legal requirement.

Since high-ratio mortgages are insured, the mortgage rates are often lower than a low-ratio mortgage rate.

Learn more about Mortgage default insurance and Canada Mortgage and Housing Corporation (CMHC).

What is the mortgage stress test?

The mortgage stress test requires financial institutions to make sure a borrower can still make mortgage payments if the Bank of Canada's (BoC) prime interest rate increases.

When applying for a mortgage, the borrower must qualify at the given interest rate plus 2%, or the Mortgage Qualifying Rate (MQR) set by OSFI (Office of the Superintendent of Financial Institutions), depending on which is higher.

The stress test was first introduced in 2017 to make sure new home purchasers weren't borrowing more than they could afford and ensuring they could manage payments if there was a sudden rise in interest rates.

What is the difference between a mortgage amortization period and mortgage term?

Your mortgage will have a set term. The term is the length of time you are committing to your mortgage agreement and interest rate. Most mortgages have a 1 to 5-year term. Your mortgage amortization, on the other hand, is the length of time until your mortgage is fully repaid.

Your amortization length will typically range from 25-30 years. If the mortgage is insured, then the maximum is 25 years.

What is the difference between a fixed rate and a variable rate mortgage?

With a fixed-rate mortgage, you can take comfort knowing your mortgage payments and interest rate will always be the same over the term of your mortgage. Choosing a fixed-rate mortgage allows you to lock in your interest rate and protects from rate increases.

With a variable-rate mortgage, your payments and interest rate will fluctuate based on the QuestMortgage prime rate. A variable-rate mortgage is attractive if rates decline, which may help you save over the term of your mortgage. However, if the prime rate increases, so will your rate and payments.

What is mortgage default insurance?

Mortgage default insurance protects lenders if a borrower is unable to repay their mortgage and is a legal requirement for high-ratio mortgages (less than a 20% down payment).

Learn more about Mortgage default insurance and Canada Mortgage and Housing Corporation (CMHC).

What counts as income for my mortgage application?

You can use a variety of income sources to to qualify for a mortgage. Please reach out to our team of expert Mortgage Advisors at 1.888.909.5588 and they'll be happy to help verify your sources of income.

Please note that for some sources of income (such as rent, for example), there may be an adjustment to the amount that's used for qualification.

What documents do I need to provide when applying for a mortgage?

The documents you need depend on your current situation. Buying your first home, or switching mortgages will both require specific documentation that you can upload and submit online. If you have any questions, your Mortgage Advisor will be able to provide a list of documents required.

Contact our team of expert Mortgage Advisors at 1.888.909.5588 and they'll be happy to assist you.