Important First Time Mortgage Information

The process of buying a home can be intimidating if you’ve never been a homeowner before. When seeking out first-time mortgage information, it’s more valuable to speak to an expert – someone who earns a living providing this guidance and resources. And, since finding the right mortgage has changed so much in 2023, most mortgage applications are treated on a case-by-case basis as each application is unique. This list will outline first-time mortgage information that is important to first-time buyers in 2023 and 2024.

First Time Mortgage Information:

  1. Credit: What is your credit score range (excellent, good, fair, poor, and bad)? The number score is important, as is the activity on the report. Banks put less emphasis on the actual score and more emphasis on what the activity looks like (re-payment habits, number of active trades, credit tenure, inquiries, etc.).
  2. Down Payment: Once determining how much of a down payment you need, the bank will need to know where the money is coming from (this is an important requirement as the anti-money laundering act plays a big role now). For example, they will need to trace your down payment within the last 90 days, and large deposits that happen within that 90-day period will be questioned. Acceptable sources of down payment include personal savings, RRSP, FHSA, investments, gifted money, inheritance, equity from another home). The minimum down payment required by any bank in Canada is 5% of the purchase price (as long as the purchase price is under one million).
  3. Employment: Are you employed, self-employed, contract or commission-based? Do you need your bonus or part-time income to make the deal work as well? Employment status is the next most important factor in determining if you can afford the mortgage you’re seeking. More complex types of income (self-employed, part-time, commission) require further proof of stable income by way of additional supporting documents. Job tenure is also very important. Banks will put emphasis on how long you’ve been at your current employer and depending on the nature of the employment, they may ask for previous employment information for further validity. Standard documents that might be required are letters of employment, pay stubs, notice of assessments + T1 generals, bank statements, T4s, and business registration documents, among others.
  4. Debt: How is your debt load? Do you already carry a lot of debt, each with its own monthly payment obligation? Debt impacts your 2 qualifying debt servicing ratios (GSD & TDS). These are the two ratios used by every bank/credit union to underwrite each deal. They cannot exceed a certain percentage (each bank will have its own guidelines and restrictions). Things that will impact your ratios significantly are car loans, student loans, high credit card balances, lines of credit, personal loans, payday-type loans, other mortgages, etc.).

Finding consistent first-time mortgage information is harder these days – as banks become stricter with their lending guidelines the government tightens banking rules. This is especially true in times of economic uncertainty, such as 2023 and 2024, where so much is changing, so quickly. For that reason, the first-time mortgage information you need is not as black & white as it used to be. There is much of a grey area that most consumers now fall under.

Be fair to yourself by speaking with a professional such as CMS. Share everything you can in the early stages as it will be of most benefit to you in the later stages of the process as we can cater the first-time mortgage information you need to your specific scenario. Call us when you’re ready at (905) 455-5005.

New Cap on Home Equity Lines of Credit in Canada – October 31, 2023

Today, clients with a revolving portion of their mortgage (or collateral mortgage as it’s often referred to) can use or reuse up to 80% loan-to-value as the mortgage is paid down. This is inclusive of both mortgage and Home Equity Line of Credit (HELOC) products.

However, OSFI (Office of the Superintendent of Financial Institutions) has stepped in to change this amid concerns about the persistent outstanding household debt of Canadian households. It’s evident, now, that this consumer debt is leaving borrowers vulnerable during negative economic periods. As of March 2022, there was over $204 billion worth of HELOCs above the 65 percent mark. This number has likely increased significantly since, as homeowners grab at what’s available to service the higher costs of living and investing.

Effective October 31st, 2023 (or December 31st, 2023, depending on the bank’s fiscal year), new Canadian guidelines will limit the amount clients can use/reuse (without seeking a new credit approval) to 65% of the value of their property. This is based on the appraised value of their home on file. If borrowers wish to maximize their borrowing capability to 80% LTV, they will need to submit a refinance request that will require new credit approval and a new appraisal – in other words, they’ll be applying based on today’s qualifications and home prices.

Most banks have revised their Credit Usage section of the collateral mortgage service agreement to reflect the changes and are rolling out notices to their clients. No action is required from borrowers, and their current mortgage and HELOC will remain unchanged in terms of interest rates and payments.

Borrowers who took out a collateral mortgage prior to October 31st, 2012, and have not had another appraisal/re-adjudication/refinance since that time, will not be impacted by this change. If or when these clients do make a change to their existing mortgage, they will be subject to the new guidelines as well.

While this change is not expected to erode the value of your home, it is ultimately reducing borrowing power, which can have an indirect impact on home prices across Canada. It’s not unrealistic to believe that many Canadians rely on their available home equity to make investment purchases. Less access to funds means less funds available to compete in the Canadian market. If enough people are impacted by this removal of liquidity, competition could soften – and prices could follow.

Here is an example to help illustrate:

A couple purchased a home in August of 2017. They paid $700,000 and put 20% down. They sought a mortgage of $560,000 which was registered as a collateral (or step) mortgage. The property was appraised at the time for $700,000.

Since this is a collateral (or step) mortgage, as they pay down the principal on the mortgage, that principal becomes available to them as credit (under a HELOC product).

It’s now 2023, and they have paid down the principal on their mortgage to $490,000. This means that they should have $70,000 available to them to withdraw under the HELOC. And this would be true, were the rules not changing.

However, effective October 31st, 2023 the maximum they can utilize is only 65% of the property value – no longer 80%. The appraisal value that the bank has on file is $700,000 (even though their property is now worth well over $1,000,000).

65% of $700,000 is only $455,000… $455,000 is less than the mortgage balance they currently owe, so they are unable to borrow any additional money unless they do both of the following:

  1. Get a new appraisal on their home.
  2. Get a new credit approval to borrow up to 65% of the new appraised value.


There will be many questions about this change, and we encourage you to reach out at your earliest to address it with an expert who can provide throughout guidance and resources. Call us today at (905)  455-5005.

6 Mortgage Renewal Tips for 2024


When it’s time for your mortgage renewal in 2024, you may explore options with other institutions, or like most homeowners, you may simply renew without any questions to avoid the headache. After all, a mortgage renewal is simply that – a renewal of all existing terms and conditions for another given period. The truth is the mortgage renewal process shouldn’t be frustrating at all. And how could it? As a mortgage broker, we do the work for you.

How do you know that you don’t qualify for a better rate, a better term, or better conditions? You don’t, and you will never know unless you take the initiative to move forward. Even if you don’t qualify for something better right now, part of the mortgage renewal process should be to learn when you do, so you are aware of when to make the switch to another bank/lender. It’s 2023 and sadly the record low-interest rate environment is behind us. Good advice is more valuable now than in the decade that proceeded us.

Here are some great tips for helping you with the mortgage renewal process in 2023 & 2024:

  1. Deal with a mortgage broker. That’s right, deal with a broker instead of trying to negotiate alone. Fact: Homeowners who deal with a broker pay less than those who do not! Over the course of a 5-year term, the savings can sometimes amount to over $5000.
  2. At renewal time, there is no penalty to switch lenders. Allow your mortgage broker the flexibility to explore mortgage products offered by other institutions. It is to your advantage to know what is available in the market.
  3. Find a mortgage broker not weeks, but months before your mortgage renewal. No, the process is not that long, and it won’t involve months of back-and-forth communication, but it does allow your broker the time to negotiate, provide supporting documents and get a commitment without the pressure of missing the deadline. It is important to remember that your broker is usually fast with their response time, but many times the lenders can take longer to respond.
  4. It is unfair to assume what you currently have is the best you qualify for. Sometimes you will get quoted a rate that isn’t the best. Your mortgage broker will negotiate with different lenders to get them to match or even beat the competitor’s rates.
  5. Don’t get fixated on interest rates alone. Other options are important and can lower your payments, but you wouldn’t otherwise know this unless it was explained by a professional such as your mortgage broker. At the time of your mortgage renewal, reflect on your last term. If you weren’t completely satisfied, see how a different amortization, payment schedule, or rate type may benefit you.
  6. Do research to give yourself a better understanding of what’s available. There are hundreds of blogs with really great information, so it doesn’t hurt to ask your mortgage broker about the options you read about.

A mortgage renewal is more than an offer for renewal with your existing mortgage lender. It’s an opportunity to seek better financial options and at Canadian Mortgage Services, we have the expertise to advise, educate and negotiate with regards to your future financials. Make it a habit to have your broker represent you and your mortgage as you would have a lawyer represent you in the courtroom, or a stockbroker represent you with investment decisions. In any of these scenarios, there is money to be saved – money that you deserve to keep in your pocket. Call us today at (905) 455-5005.

Why is my Mortgage Affordability Going Down?

We frequently get repeat inquiries from clients we’d spoken to in the past. For various reasons, they weren’t ready to make their purchases or refinance at the time but were working towards setting themselves up to do so (i.e., down payment, credit, etc.).  Now that they are ready to move forward, they find themselves not being able to qualify for the same mortgage they would have a year prior (or sometimes, only months later). What gives!?

The short answer is that interest rates have nearly tripled from their all-time lows in 2020-2022, and the published qualifying rate is no longer used in the stress test. As a reminder, the stress test that needs to be used in qualifying for a mortgage is either the published “qualifying rate” (which is currently 5.25%) or the contract rate + 200 bps (basis points), whichever is higher. By default, all mortgages are now being qualified at the posted rate +200 bps as this exceeds the qualifying rate in all cases. (At the time of writing – August 2023).

From 2020 – early 2022, the “contract rate” + 200 bps was less than the qualifying rate. Therefore, in most cases, the qualifying rate was used across the board to determine maximum mortgage affordability. This means that the stress test has ultimately gone up, which unquestionably puts downward pressure on one’s mortgage affordability.

For example, if you have an income of 100k and used the qualifying rate of 5.25%, you could manage a maximum mortgage of approximately $480,000. However, using a contract rate of 5.34% + 2% (or 200 bps), then the maximum mortgage affordability gets reduced to approximately $420,000. This is just a rough calculation for illustration purposes.

In short, the main reason for this shift in the stress test approach is that the contract rate has risen to exceed the qualifying rate. Fortunately, home prices have recently come down from their all-time highs and in some cases, are enough to offset any decrease in mortgage affordability. But the Canadian housing market remains competitive and although home appreciation has decelerated, housing remains unaffordable for many in 2023.

Conclusion: There is no one in Canada, who hasn’t seen a decrease in their mortgage affordability, as the rules apply to everyone! Although this is the current state of qualifying for a mortgage, there are often strategies we can use to help nudge (increase) mortgage affordability in a favorable direction. If you would like to learn more about this topic or would like to assess your affordability, please give us a call today at (905) 455-5005.

Unlocking the Potential of Mortgages in 2023 & 2024

Reimagining Mortgage Services: Unlocking the Potential of Mortgages in 2023 & 2024.

In the ever-evolving landscape of real estate, especially in 2023, mortgage services have become more versatile than ever. While traditionally associated with purchasing homes and refinancing existing mortgages, these services have adapted to meet the dynamic needs of homeowners and investors in 2023 – as Canada holds endless opportunities for Canadians looking to grow their wealth. Let’s explore how mortgage services have transformed and the innovative ways they can now benefit individuals and families.

  1. Mortgage for Debt Consolidation: A Path to Financial Freedom

The concept of using a mortgage to consolidate debts remains relevant in 2023, as it continues to be an effective strategy for individuals burdened by high-interest loans. Despite historically low rates being well behind us, leveraging the equity in your home to pay off higher-interest debts can lead to significant savings and expedite the journey to becoming debt-free sooner. Whether it’s credit card debt, student loans, or other obligations, mortgage services can provide a lifeline for those seeking financial relief while the economy recovers.

  1. Mortgage for Investment: Building Wealth with Real Estate

The allure of real estate investment remains strong in 2023, and mortgage services play a pivotal role in helping individuals capitalize on this opportunity. As housing markets continue to evolve, leveraging existing home equity to invest in additional properties can yield substantial returns. Whether it’s rental properties, vacation homes, or commercial ventures, mortgage services offer tailored solutions to facilitate smart investment decisions. As the saying goes, the best time to buy assets is when they’re distressed.

  1. Mortgage for Home Renovations: Elevating Your Living Space

In the current housing landscape, where inventory remains limited, homeowners are increasingly turning to home renovations to create their dream living spaces. Mortgage services now cater to this demand by offering convenient financing options for home improvements. By tapping into their home equity, homeowners can undertake renovations that not only enhance their living experience but also boost the overall value of their property for a future sale.

  1. Home Equity Lines of Credit (HELOC): Financial Flexibility Redefined

With homeownership being Canadians’ biggest financial asset, Home Equity Lines of Credit (HELOC) have gained popularity as a flexible borrowing option. In 2023, HELOCs are more accessible and still offer competitive rates relative to unsecured debt, making them an attractive choice for individuals seeking immediate access to funds. Whether it’s funding education expenses, covering unforeseen medical/living costs, or investing in personal ventures, HELOCs provide the freedom to manage finances on your terms.

A Flexible Approach to Mortgage Financing

In the heat of this economy, mortgages are no longer limited to traditional purposes (aka purchases and mortgage refinancing). Banks and Lenders now offer a flexible approach to mortgage solutions, supporting the different needs and goals of homeowners and investors. They know that home equity can help Canadians grow and better themselves, and so, they have expanded their product offering.

If you find yourself in need of financial assistance, are considering the potential of your home equity, or are looking for ways to build wealth through real estate, our team can guide you through the many mortgage services available in 2023 and 2024. Whether you are a first-time homebuyer or an experienced investor, it pays off to work with a brokerage that has great reviews and a great reputation in your community.

Use your mortgage as a tool to help you! Connect with us today to explore the latest mortgage services that will support your financial journey in 2023 and 2024. (905) 455-5005

Is Bridge Financing Right for Me in 2023-2024?

Bridge financing remains a valuable and time-sensitive mortgage solution, addressing the needs of homeowners facing the challenge of mismatched closing dates when selling their existing home and purchasing a new one. While not applicable to all mortgage transactions, bridge financing can be a lifeline for those navigating real estate transactions in 2023 and 2024. As the housing market evolves, understanding the ins and outs of bridge financing becomes essential for homeowners seeking a smooth transition between homes. In this updated blog, we will explore the relevance of bridge financing in the current market and address common questions to help you make informed decisions. You can also visit another one of our blogs which explains everything you need to know about mortgage bridge financing in Canada what is bridge financing (

Bridge Financing in Today’s Market: In 2023, bridge financing continues to be a relevant option for homeowners who find themselves in the situation of needing a ‘bridge loan’ due to misaligned closing dates. This scenario typically occurs when selling and buying simultaneously, and the proceeds from the sale of the existing property are needed to serve as the down payment for the new purchase. While bridge financing is not a one-size-fits-all solution, it remains a crucial consideration for those aiming to avoid renovation inconveniences or timing challenges during the transition between homes.

Exploring Bridge Financing Options: As the housing landscape evolves, it’s vital to explore bridge financing options as soon as possible with your mortgage broker. Not all financial institutions offer bridge financing, making early planning and consultation essential. Due to the complexities involved compared to a standard purchase, having a bridge financing solution in place well before the scheduled closing date becomes crucial for a seamless transaction.

Addressing Common Questions on Bridge Financing:

Q: How can I avoid bridge financing by coordinating closing dates?

A: While coordinating closing dates between the sale and purchase of a home is an ideal scenario, it may not always be feasible. Negotiations with buyers and sellers, along with market conditions, can impact the flexibility of closing dates. In such cases, bridge financing can provide a smoother transition, especially for families who wish to move without the need for living amidst renovations.

Q: What are the requirements for bridge financing to work?

A: To successfully obtain bridge financing, a ‘firm, condition waived’ sale agreement must be in place for your existing property. Additionally, a firm sale agreement for your purchase property is required, as with any standard mortgage application.

Q: Is bridge financing more expensive?

A: Yes, bridge financing typically incurs higher costs due to its short-term nature, usually lasting no more than 90 days (but sometimes as long as 6 months if needed). During this period, you can expect a higher interest rate on the amount bridged and associated costs, including legal and administrative fees. This is attributed to the increased risk undertaken by financial institutions during bridge financing arrangements.

Q: Is bridge financing guaranteed, and are there alternatives?

A: Bridge financing is not guaranteed, and eligibility depends on factors such as debt servicing, equity, and credit history. Consulting an experienced mortgage broker familiar with this type of financing is crucial to navigate the process successfully. If bridge financing is not viable, alternative sources such as borrowing from family, friends, private lending (with associated costs), or exploring a vendor takeback (less common in today’s market) can be considered.

Conclusion: In 2023, as the Canadian real estate market remains highly competitive, bridge financing remains a relevant and valuable option for homeowners facing the challenge of mismatched closing dates. By planning, exploring various mortgage options, and seeking the expertise of experienced mortgage brokers, homeowners can make informed decisions that best suit their unique circumstances. Bridge financing continues to be an essential tool for those seeking a smooth transition between homes, providing valuable support in a dynamic real estate market.

Call us today to find out if bridge financing is the right idea for you. (905) 455-5005

What Is Bridge Financing in Canada?

Buying and selling a home can be a complex process, especially when the timing between closings doesn’t align perfectly. While the concept remains the same, we’ve updated this blog to make it more relevant to the current real estate landscape in 2023.

What is Mortgage Bridge Financing?

Mortgage Bridge financing is a financial tool designed to assist homeowners in navigating the transitional period between selling their current home and buying a new one. Suppose you’ve listed your existing property for sale and hope to use the proceeds as the down payment for your new home. However, if the closing date of your new home is BEFORE the sale of your existing property, you may find yourself in need of additional funds to complete the purchase as your down payment is tied up in the equity of the sale. And of course, proceeds of the sale are not made available to you until the day of closing (sometimes the day after). This is where bridge financing comes into play.

How Does Mortgage Bridge Financing Work?

When you seek bridge financing, you secure a short-term loan to cover the down payment and closing costs of the new property. This temporary loan allows you to complete the purchase without waiting for your existing home to sell. During this period, you’ll make monthly payments (based on a per diem) on the bridge loan until your existing property is sold. Many banks offer bridge financing for up to 6 months, while others can make exceptions for up to 12 months.

It’s essential to note that lending institutions will typically secure the loan against both your existing and new properties until the existing property is sold (also referred to as a collateral loan). This ensures the lender has a level of security in case the sale doesn’t go as planned.

Requirements for Mortgage Bridge Financing

To qualify for bridge financing in 2023, borrowers must meet certain requirements:

Accepted Purchase Agreement: You need to provide a purchase and sale agreement for the new property. This agreement confirms that your offer to purchase the property has been accepted by the seller.

Firm Sale Agreement for Existing Property: You must have a firm sale agreement for your existing property. A firm agreement means that the sale is not conditional on financing, inspection, or other clauses.

Interest Rates for Mortgage Bridge Financing

Bridge financing typically comes with terms like an open mortgage, meaning it is a short-term solution. Since bridge loans are intended for temporary use, they carry higher interest rates compared to traditional mortgages (prime +). However, given the short duration of the loan, the overall interest costs are often manageable.

Why Consider Mortgage Bridge Financing?

In today’s fast-paced real estate market, bridge financing remains a valuable option for several reasons:

Competitive Real Estate Market: In competitive housing markets, securing a new property can be challenging. Bridge financing allows you to move quickly and secure your dream home without waiting for your existing property to sell.

Flexible Timing: Bridge financing offers flexibility in timing the purchase and sale of homes, giving you better control over your move.

Avoiding Temporary Housing: With bridge financing, you can avoid the inconvenience and cost of temporary accommodation arrangements between selling your old home and purchasing a new one. This can be very inconvenient for everyone, but especially for those with young children.


At Canadian Mortgage Services, we understand that every homeowner’s situation is unique. Whether you’re considering bridge financing or other financing solutions, our experienced team can help you find the right option that fits your needs. Contact us today to learn more about our range of financing solutions – (905) 455-5005

Tips: Applying for a Mortgage with Bad Credit in 2023

Securing a mortgage is the most significant step towards homeownership, and while the process remains largely unchanged, Canadians with bad or bruised credit will encounter some unique challenges. In this updated blog, we will explore the adjustments in mortgage requirements and provide valuable insights for Canadians in 2023’s lending landscape.

Credit Scores and Down Payment: Credit scores play a crucial role in determining a lender’s risk assessment. Traditionally, individuals with excellent credit (typically above 650) could obtain a mortgage with a minimum 5% down payment. However, for those with poor credit, additional considerations come into play. Scores below 650 often require exceptions, leading to higher down payment requirements. It’s not uncommon for banks to ask for a 10% down payment or more (upwards of 20%) in these cases.

Alternative Lenders (or ‘B’ Lenders): When major banks are unable to make exceptions for individuals with poor credit, the alternative lending route becomes a viable option. These lenders, commonly referred to as B lenders, may provide mortgages up to a maximum of 80% loan-to-value, requiring a minimum 20% down payment.

Costs Associated with Alternative Lending: Applying for a mortgage through alternative lenders usually entails additional closing costs not typically encountered with traditional lending. These costs may include lenders’ fees, commitment fees, appraisal fees, brokerage fees, and others. It’s important to consult with a mortgage professional to determine the specific costs applicable to your unique situation as costs will very depending on the bank and mortgage product.

Understanding Your Credit Score: Before diving into the mortgage application process, it is crucial to obtain and understand your credit score. Knowledge of your creditworthiness helps you make informed decisions and prevents potential disappointments later. Take the time to review your credit report, identify areas for improvement, and work towards enhancing your credit score if necessary. We have published many blogs and tips on how to improve credit scores.

Affordability Considerations: Affordability is assessed on a case-by-case basis. B lenders will offer mortgages at slightly higher interest rates, affecting your debt servicing ratios. However, these types of banks and lenders also allow higher ratios than the major banks, enabling borrowers to afford a higher amount of financing. We will guide you through the process to ensure you find the most affordable and feasible option for your circumstances.

Conclusion: Mortgages are available for applicants, whether they have excellent credit or bad credit. When applying for a mortgage in Canada, it’s essential to address credit challenges head-on and explore B lending options if necessary. By understanding your credit score, working to improve it, and being prepared in advance, you enhance your chances of securing a mortgage that aligns with your homeownership goals. Our team is dedicated to supporting you throughout the process, offering expert guidance and insights to ensure a successful mortgage application. Contact us early to benefit from valuable tips and strategies that will position you for a confident and successful home purchase. Remember, taking the time to improve your credit can make a significant difference, especially when faced with limited resources for a larger down payment. Call us today at (905) 455-5005.

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