Two mortgages with the same rate can cost very different amounts once you prepay, move, renew or break the contract early. The 15 questions below are about the mortgage itself: ask them of every lender or broker whose offer you’re comparing, and get the answers in writing. Questions about the broker (their licence, lender panel and pay) are in how to choose a mortgage broker. More guides on lenders and brokers are in the lenders and brokers hub.
Rate questions
1. What is the rate, and is it fixed or variable?
| Rate type | How it works |
|---|---|
| Fixed | The rate stays the same for the whole term |
| Variable | The rate moves with the lender’s prime rate; the payment may stay the same |
| Adjustable | The rate moves with prime and the payment changes with it |
A fixed rate buys certainty; a variable rate rises and falls with prime. Also ask: is this a discounted rate, and is it the lowest you can offer? Lenders and brokers often have room to negotiate, as covered in mortgage negotiation tactics. The trade-offs are in fixed vs variable mortgages.
2. How long is the rate hold?
A preapproval can hold an interest rate for 60 to 130 days, depending on the lender. Ask how long the hold lasts, whether you get a lower rate automatically if rates fall during the hold, and what happens if the hold runs out before you buy. A preapproval isn’t an approval; mortgage pre-approval explains what it does and doesn’t guarantee.
3. Which term fits my plans?
Terms usually run from 1 to 10 years. A shorter term means renewing sooner (at whatever rates are then); a longer one locks in the rate and conditions for longer but can mean a bigger penalty if you break it. Ask how the lender’s rates differ by term for your file; current rates by term are on today’s mortgage rates.
Prepayment questions
4. What are the prepayment privileges?
Prepayment privileges let you pay the mortgage down faster without a penalty:
| Privilege | What to ask about |
|---|---|
| Lump-sum payment | The yearly limit, often 10%–20% of the original balance |
| Payment increase | How much you can raise the regular payment each year |
| Double-up payments | Whether you can make an extra payment on a payment date |
The limits matter if you expect a bonus, an inheritance or other windfall. On a $400,000 mortgage, a 20% lump-sum privilege allows $80,000 a year without penalty, against $40,000 at 10%.
5. Can I change my payment frequency?
Ask which frequencies the lender offers and whether it has accelerated options. Accelerated bi-weekly or weekly payments pay the mortgage down faster than plain bi-weekly or monthly ones; the differences are worked through in the mortgage payment frequency guide.
Penalty questions
6. What is the penalty for breaking the mortgage early?
This is the question most borrowers forget. Breaking a closed mortgage, paying it off early or prepaying more than your privileges allow usually costs the higher of 3 months' interest and the interest rate differential (IRD) on a fixed rate, and typically 3 months' interest on a variable rate; your mortgage contract sets the exact method and comparison rate, and a federally regulated lender must tell you how it calculates the penalty.
7. How exactly do you calculate the penalty?
Lenders compare rates in different ways when they work out a fixed-rate penalty, and the method, not the rate, can decide whether breaking the mortgage costs a few thousand dollars or several times that. Ask which rates the lender uses in the calculation and for a sample penalty quote. How the calculation works is in how mortgage penalties are calculated, and the mortgage penalty calculator estimates one.
Flexibility questions
8. Is the mortgage portable?
| Feature | What it means |
|---|---|
| Portable | You can move the mortgage to a new home if you sell |
| Not portable | Moving means breaking the mortgage and paying the penalty |
Portability matters if you might move during the term. Lenders’ terms vary, including how long you have to complete the port (commonly 30 to 120 days).
9. Is the mortgage assumable?
An assumable mortgage lets a buyer take over your mortgage, rate and terms included, with the lender’s approval. It’s uncommon but can help a sale when your rate is lower than current rates. See assumable mortgages.
10. Is this a collateral charge or a conventional charge?
| Type | What it means |
|---|---|
| Conventional charge | Registered for the amount you borrow; usually simpler to move to another lender at renewal |
| Collateral charge | Can be registered for more than you owe; easier to borrow more later, but moving to another lender usually means discharging and re-registering |
Some lenders register every mortgage as a collateral charge. Which lenders do, and what it costs to switch away, is in collateral vs conventional mortgages.
Cost questions
11. What fees are involved?
| Fee | Typical amount | When it applies |
|---|---|---|
| Appraisal fee | $300–$500 | Some lenders pass it on |
| Discharge fee | $200–$350 | When you pay off or move the mortgage |
| Assignment fee | $200–$500 | When the mortgage is transferred |
| Reinvestment fee | Varies | Some lenders charge it when you break the mortgage |
| Legal fee help | Varies | Some lenders cover part of your legal costs |
Ask about any fee the broker charges too; on most prime mortgages there is none, as explained in how mortgage brokers get paid.
12. Is there a cash-back option?
Some lenders pay a percentage of the mortgage in cash at closing in exchange for a higher rate, and may claw it back if you break the mortgage early. Whether the cash is worth the higher rate is worked through in cash-back mortgages.
Renewal questions
13. What happens at renewal?
| Question | Why it matters |
|---|---|
| Will I be offered your best rate at renewal? | A lender’s first renewal offer isn’t always its lowest rate |
| Can I move to another lender at renewal without a penalty? | Usually yes at the end of the term; a collateral charge can add costs |
| When will I hear from you? | Federally regulated lenders have a deadline (below) |
| Can I change the term or rate type at renewal? | Most lenders allow it |
If your mortgage is with a federally regulated lender, such as a bank, the lender must send you a renewal statement at least 21 days before your term ends, or tell you by then that it won't renew; the statement shows the balance, interest rate, payment frequency, term and any fees, and says the rate offered won't go up before the renewal date. Negotiating the renewal offer is covered in the mortgage renewal guide, and moving to a new lender in switching mortgage lenders.
14. Do you offer a blend-and-extend?
A blend-and-extend combines your current rate with a new rate for an extended term, instead of breaking the mortgage and paying a penalty outright. Not all lenders offer it, and the way they blend the rates varies; see blend-and-extend mortgages.
The closing question
15. Why should I choose you over other lenders?
It’s the question most people hesitate to ask, and the most revealing. A good lender or broker can say clearly:
- what makes their rate competitive for your file;
- what service you get after closing;
- how they handle renewal;
- how their penalty is calculated, and why.
If the answers are vague, that’s worth weighing against the rate.
Quick reference checklist
| # | Question | Answer |
|---|---|---|
| 1 | Rate, fixed or variable? | |
| 2 | Rate hold period? | |
| 3 | Term for my plans? | |
| 4 | Prepayment privileges? | |
| 5 | Payment frequency options? | |
| 6 | Penalty for breaking early? | |
| 7 | How the penalty is calculated? | |
| 8 | Portable? | |
| 9 | Assumable? | |
| 10 | Collateral or conventional charge? | |
| 11 | All fees? | |
| 12 | Cash-back option? | |
| 13 | Renewal process? | |
| 14 | Blend-and-extend available? | |
| 15 | Why this lender? |
Print the list and bring it to every rate comparison.
Related pages
Sources
The figures and rules on this page come from these sources, last checked against them on September 29, 2026. How we check facts.
- Financial Consumer Agency of Canada: Getting preapproved for a mortgage
- Financial Consumer Agency of Canada: Breaking your mortgage contract
- Financial Consumer Agency of Canada: Mortgage fees: Prepayment penalties
- Financial Consumer Agency of Canada: Renewing your mortgage
- RBC: Variable Rate Mortgage | RBC Royal Bank of Canada