As a home buyer, choosing the best mortgage is essential. Not only will it directly impact how much you pay for your house over time, but it will also determine how long it takes and how often you need to choose a new mortgage contract.
If you’ve never bought a house before, you may not be familiar with how mortgages work and how to sort through your options.
In this blog, we’re sharing helpful insights on how to choose the right mortgage for you. Let’s get started!
About to buy a house? Check out our 2026 home buyer’s checklist.
Choosing a Lender
When it comes to choosing an actual mortgage provider, not all lenders are the same.
In Canada, there is a wide range of financial institutions that offer mortgage products, including major banks, cooperatives, credit unions, and private lending companies. With so many options, it’s important to do your research and closely consider the pros and cons of whichever institution you work with.
If you don’t have a bank or lender in mind, it’s a good idea to work with a mortgage broker. As the job title suggests, mortgage brokers are professionals who specialize in helping buyers choose the right mortgage. After getting a sense of your budget, preferences, and intentions, they can connect you to the mortgage products and lenders who will fit you best.
On the hunt for more home buying advice? Check out these blog posts next!
- What Conditions Should You Include in Your Buying Offer?
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- Is it Time to Stop Renting and Buy Your First Home?
Interest Rates: Variable vs Fixed
Beyond your lender, another essential factor in choosing the right mortgage comes down to interest rates. Generally speaking, there are two types of interest rates attached to mortgage products: fixed rates and variable rates.
With a fixed rate mortgage, your interest rate will remain the same for the duration of your term. When the term is up, you’ll get a renewal offer, which may include an updated rate.
Homeowners with variable rate mortgages see their interest costs fluctuate over the course of their term. This can be beneficial when interest rates go down, however, it can also present challenges when interest rates go up.
Understanding Mortgage Terms
As a home buyer, you’ll also want to consider which mortgage term will suit you best.
Every mortgage contract comes with a term, which can stretch from a few months to a few years. The length of your term will directly influence other important elements of your mortgage, including the interest rate you qualify for, financial penalties if you break the contract, and how frequently you renew your contract.
It’s important to keep in mind that you won’t be paying off your entire mortgage in a single term. Rather, you’ll be renewing your contract every time the term is up until you’ve paid back the full mortgage amount.
What’s the Ideal Amortization Period?
Looking long term, your amortization period will be the total length of time that it takes you to pay off your mortgage. Once again, you’ll be faced with a number of different options.
The longer your amortization period, the lower your monthly payments will be. This can make it easier to manage your personal finances every month, however, you will pay more in interest costs over time.
With a shorter amortization period, your monthly payments will be higher, but your long term costs will be lower. It’s important to be realistic about what you can afford to spend on your mortgage each month so that you don’t fall behind on your payments.
Buying a home soon? Read these other blogs for more advice?
- What Happens on Closing Day?
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Applying For Mortgage Pre-Approval
Once you have an idea for which mortgage products and lenders are the right fit for you, it’s a good idea to apply for pre-approval – even if you haven’t started house hunting just yet.
When you apply, your chosen lender will take a close look at your personal finances, analyzing elements like your employment and income, credit history, debts, savings, and more. They’ll then decide how large a loan they’re willing to offer you based on their findings.
As a buyer, this gives you a clear budget of what you can afford before you head to the market.
On top of that, getting pre-approved for a mortgage demonstrates your financial readiness to a seller, which can be a significant advantage when submitting an offer on a home you love.
Buy a House With Bosley Real Estate
Ready to buy a home? We’re ready to help you make the most of your market experience. Bosley Real Estate has helped Canadians find the perfect home for close to a century. Today, our advanced buying systems, client-first approach to service, and vast industry relationships can help you build a thoughtful home-buying roadmap, leading to a smooth and successful home purchase.
Ready to buy your first home? We can help! Give us a call at 416-322-8000 or email info@bosleyrealestate.com to get in touch.
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