Finder makes money from featured partners, but editorial opinions are our own.
Compare mortgage lenders in Canada
All mortgages are not created equal. Let us help you find one that works for your needs.
{"userFilters":[{"config":{"MULTISELECT":true,"VALUES":"Direct Lender,Broker"},"dataSelector":{"recordType":"product","fieldCode":"DETAILS.LENDER_TYPE"},"dataType":"TEXT","label":"Provider Type","order":1},{"config":{"MULTISELECT":true,"VALUES":"First mortgage, Second mortgage, HELOC, Refinancing, Reverse mortgage, Bridge mortgage, Rent to own"},"dataSelector":{"recordType":"product","fieldCode":"DETAILS.OFFERED_LOANS"},"dataType":"TEXT","label":"Loans Offered","order":2},{"config":{"MULTISELECT":true,"VALUES":"Alberta, British Columbia, Manitoba, Newfoundland and Labrador, New Brunswick, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan, Yukon"},"dataSelector":{"recordType":"product","fieldCode":"DETAILS.PROVINCES_TABLE_FILTER"},"dataType":"TEXT","label":"Where do you live?","order":3},{"config":{},"dataSelector":{"recordType":"product","fieldCode":"GENERAL.PROVIDER_ID"},"dataType":"UUID","label":"Provider","order":4}],"niche":{"currencySymbol":"$","decimalPoint":".","decimalPlaces":"2","thousandsSeparator":",","filterBoundsMap":{"product.DETAILS.LENDER_TYPE":null,"product.DETAILS.OFFERED_LOANS":null,"product.DETAILS.PROVINCES_TABLE_FILTER":null,"product.GENERAL.PROVIDER_ID":null}},"prefilled":false}
There is no “best mortgage”: Finding the best mortgage is personal, so you’ll want to consider your individual circumstances when you’re looking for the best one for your needs. Here are some important factors to consider:
Your current financial needs. Analyze your budget to determine how much you can reasonably pay each month toward your mortgage. Your interest rate, rate type and loan term will affect the monthly payments you’ll ultimately take on.
Your future financial needs. A mortgage is a long-term financial tool that can help you buy one of the biggest assets you’ll likely ever own. To find a mortgage that grows with you, think about your needs and wants — both now and in the future. Whether you’re a young professional, a growing family or an almost retiree, your needs will differ.
The purpose of your mortgage. From buying an investment property to funding your family home, the purpose of your mortgage can affect what you’re eligible for and how you manage repayments and interest.
What’s important to me?
You’ll want to consider a mortgage based on your lifestyle and goals. In general, you can break down the best mortgages into three categories:
Many factors go into determining the least expensive mortgage. In general, an inexpensive mortgage might be the one that offers:
The lowest rate. If a mortgage interest rate is low, there’s less payable interest with each repayment – leading to sizeable savings over time. You’ll also pay more towards the principal amount as opposed to interest. In addition to advertised variable and fixed-rates, some lenders offer discounts for borrowers with a good credit history or the resources to put down a larger down payment.
The lowest fees. You can save big with a mortgage that doesn’t come with expensive upfront application or closing fees, not to mention ongoing fees like mortgage insurance. Remember that a low advertised rate might not add up to savings once you’ve factored in these fees.
Pros and cons of an inexpensive mortgage
Pros
Potentially lower monthly payments.
Possible lower overall cost.
Cons
May be light on features and flexibility.
Could be harder to qualify for.
Could require a larger down payment.
The easiest mortgage
An ideal factor for some borrowers is that approval for a mortgage is quick and painless. You may be looking for a mortgage that can settle quickly or a lender willing to consider less-than-perfect credit. How easy a mortgage is to secure will differ among lenders, employment situations, credit scores, down payments and turnaround times.
Borrowers that are looking for an easy mortgage may include:
Retirees and credit-impaired borrowers. For a borrower in retirement, the right mortgage could simply be one that gets an approval without a steep interest rate. Likewise, a borrower with a poor to fair credit score might look for a lender willing to give them a second chance.
Those with a low down payment. Borrowers entering the property market for the first time with a small down payment will want to look for a mortgage that doesn’t require a 20% down payment. They’ll also need to keep mortgage insurance in mind.
Self-employed borrowers. Many lenders require paycheques or bank statements as proof of income and employment. This can be difficult for self-employed borrowers, but you’ll find lenders willing to accept alternative documents for income verification.
Borrowers looking for a quick turnaround. A straightforward, no-frills mortgage might be an option for borrowers who need to settle quickly. If you have a large deposit and good credit, you’ll likely find lenders who can turn around your mortgage rather quickly and easily. Online lenders tend to be particularly agile in approving mortgages.
Pros and cons of easy mortgages
Pros
Potential approval for a wide range of borrowers.
Could offer a faster closing time.
Cons
Might come with higher rates or fees for the convenience of speed.
The most flexible mortgage
Mortgages with more options can help you access your equity easier or allow you to pay off your mortgage faster without incurring big penalties. You could find flexible options that include:
Mortgage accelerators — allow borrowers to make accelerated weekly or bi-weekly payments, which can help you own equity in your home quicker and see you pay less interest over the life of your mortgage.
Convertible mortgage — gives you the freedom to switch between interest rates, loan terms, amortization periods and much more in order to take control of your mortgage.
Extra payments — shorten your mortgage with additional payments (per month or in a yearly lump sum) toward your principal without incurring prepayment penalties. You’ll typically need an open mortgage to avoid early repayment fees.
Cash back mortgages — allow you to earn cash back, which is usually paid in a lump sum once your mortgage is paid in full and closes. You can expect to earn between 1-5% cash back.
Product bundling — you may be able to negotiate a lower interest rate in exchange for moving your bank accounts, credit cards and loans over to your mortgage lender.
Hybrid mortgage — split your mortgage into fixed- and variable rates to reap the benefits of both types of interest rates.
Pros and cons of flexible mortgages
Pros
Can offer money-saving features.
Can enable borrowers to pay off their mortgages faster.
Can make getting a mortgage easier.
Gives you more control over how you pay your mortgage.
Cons
May carry additional fees and costs.
Requires some knowledge and know-how.
What do I do now?
If you’ve considered your circumstances and think you’ve narrowed down the type of mortgage that best suits your needs, it’s time to find a lender that offers what you’re looking for.
What type of mortgage do you want?
You’ll find a range of mortgages available in Canada – but so many choices can leave you confused. Before you apply, find out more about each mortgages features, terms and conditions.
Personal loans can get you funding for almost any legitimate reason – as long as you meet the eligibility requirements. Mortgages, on the other hand, are specifically designed for real estate. When you take out a mortgage, you’re taking out a secured loan — with the property you’re buying acting as the collateral.
You face a number of potential fees on a mortgage, including:
Upfront fees. Application, settlement, legal and evaluation fees are just a few of what you face closing on a mortgage.
Ongoing fees. Each month or year you could pay service and other account fees.
The fees that come with a mortgage vary by lender, but it doesn’t mean they aren’t negotiable. A lender may waive these fees for customers who carry multiple products (such as a bank account, credit card, etc.) or with additional steps.
In Canada, the mortgage stays with the home – it does not go to a specific person. So if your next of kin wants to take advantage of any equity you owned in the home, the mortgage will need to be settled by your estate. Your next of kin can then inherit any leftover equity.
It depends on your situation. You’d benefit from asking a financial advisor specific questions related to your current financial situation. One of your options is to tap into your equity through a home equity line of credit, which will likely require a reassessment of your home’s value from your lender. You could also apply for a home equity loan – which is a one-time lump sum loan – drawing on the equity you own in your home.
It depends on whether the residence is your primary home or not. The CRA will allow the sale of your home to be tax exempt as long as it was your principal place of residence for every year that you owned it. An investment property, on the other hand, will incur capital gains tax. Learn more about paying capital gains tax when selling property.
Application turnaround depends on the lender – however it usually takes around 2 weeks to one month. You could find that you’re approved for a mortgage within a few days. However, approval tends to come in stages. For instance, it takes a few days for mortgage underwriting approval and then another two weeks or so to receive a commitment letter from your lender. Ask about the specific approval timelines from your lender before signing a contract.
Many financial institutions offer online calculators – called mortgage affordability calculators – that can help you estimate how much you’re able to borrow based on a few details you input such as your down payment amount and your income.
Speaking to a mortgage broker or a mortgage specialist is ideal if you’re looking for specific advice about a mortgage. Brokers work on commission, so they don’t get paid until they’ve helped you settle a mortgage, while a mortgage specialist may try to offer you a mortgage via their bank or credit union. If you’re just looking for advice, both are good options for learning more about mortgages.
Leah Fallon is a freelance journalist and editor, specializing in personal finance and small business. She owns Birch Tree Bookstore in Leesburg, Virginia.
Larger living space and a garage still top the list of most desirable features, but Canada’s housing market trends continue to shift. Here’s what buyers want in 2023.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
