Mortgage Types and Features in Canada: Guide Directory

This is the directory of WealthNorth’s guides to mortgage types and features. For a one-page summary of every type with what sets each apart, start with types of mortgages in Canada; for how a Canadian mortgage works from application to renewal, see how mortgages work in Canada.

Basics and reference

• Types of mortgages in Canada: a short description of every type, with a link to the full guide on each
• How mortgages work in Canada: what a mortgage is, its parts, and the steps from pre-approval to renewal
• Mortgage glossary: Canadian mortgage terms from A to Z
• Mortgagor vs mortgagee: which party is the borrower and which is the lender
• Mortgage-backed securities and Canada Mortgage Bonds: how lenders fund mortgages and why it affects rates

Rate type

• Fixed vs variable mortgages: how each behaves, the risk of a variable rate, and the penalty difference
• Adjustable vs variable-rate mortgages: a payment that changes with prime versus a payment that stays the same
• Convertible mortgages: switching a variable rate to fixed during the term
• Negative amortization: when a fixed payment no longer covers the interest, and the ways out
• Semi-annual compounding: how interest on a Canadian fixed-rate mortgage is calculated

Terms and amortization

• Term vs amortization: the length of your contract versus the time to pay off the loan
• 3-year vs 5-year mortgage terms: what each term length trades off
• Open vs closed mortgages: prepayment freedom against a higher rate
• 25 vs 30-year amortization: a lower payment against more total interest
• 30-year insured amortization rules: who qualifies for a 30-year amortization on an insured mortgage
• Amortizations over 30 years: 35- and 40-year mortgages, who offers them and what they cost
• Mortgages on a $1 million+ home: down payment, income and financing above the insured price limit

Default insurance

• What mortgage default insurance is and costs: CMHC, Sagen and Canada Guaranty, the premium in dollars and how to avoid it
• Insured, insurable and uninsurable mortgages: the three categories, including high-ratio mortgages, and how lenders price each
• Conventional mortgages: borrowing with 20% or more down, and whether to wait until you have it

The premium schedule and down payment rules are in CMHC mortgage insurance rules, and the CMHC premium calculator works out the premium for a given price and down payment.

Mortgage features

• Collateral vs conventional charge: how the mortgage is registered and what that means when you switch lenders
• Readvanceable and all-in-one mortgages: a credit line that grows as you pay down the mortgage
• Cash-back mortgages: the real cost of the upfront cash and the clawback if you leave early
• Blended mortgages: borrowing more mid-term at a blended rate that keeps your maturity date
• Assumable mortgages: taking over a seller’s mortgage and its rate
• Vendor take-back mortgages: when the seller lends part of the price

Specialty mortgages

• Bridge financing: how a bridge loan covers your down payment when you buy before you sell (the bridge financing calculator works out the cost)
• Purchase plus improvements: buying and renovating with one mortgage
• Construction loans: financing a new build with draws
• Reverse mortgages: borrowing against your home from age 55 without monthly payments
• Reverse mortgage calculator: how much you could borrow and how the balance grows

Related guides in other hubs

Current rates and how they are set are covered in the mortgage rates hub. Other mortgage products have their guides where they fit best: commercial mortgages with investment property, B-lender mortgages with alternative mortgages, recourse vs non-recourse mortgages with mortgage rules, and what happens to a mortgage when you die with estate planning. Breaking, refinancing and borrowing against your home are in the refinancing and home equity hub, and renewing or switching lenders in the mortgage renewal hub.