Explain when you might move or repay
Tell your broker if you may sell, change jobs or make extra payments.
- Ask how each proposed mortgage handles those changes.
- Compare offers using the same loan amount and repayment period.
More on explain when you might move or repay
Keep the monthly payment within your household budget.
Ask for these costs in writing
Request a comparison you can keep with your budget.
- Include the rate, payment, term, amortization and fees.
- Ask for examples of early repayment charges and prepayment limits.
More on ask for these costs in writing
For a variable mortgage, ask how rate changes affect payments or repayment.
The basics
The parts of a mortgage that change your cost
A mortgage is more than a rate. The term is how long your current contract lasts; the Government of Canada says terms range from a few months to five years or longer. The amortization is how long it takes to pay off the whole loan. When the term ends, you renew, often at a different rate.
Rates can be fixed, variable or a hybrid of both. A fixed rate stays the same for the term. A variable rate can rise or fall. Mortgages can also be open, which allows extra payments freely but usually costs more, or closed, which usually costs less but limits extra payments.
Why it matters
Why the cheapest rate is not always the cheapest mortgage
If you sell, refinance or pay off a closed mortgage early, you may owe a prepayment penalty. A lower rate with strict rules can cost more than a slightly higher rate with flexibility, if your life changes. Read our guide to prepayment penalties before you sign.
How it works
Compare offers in a fair way
Use the same loan amount
Ask every lender to quote the same principal, amortization and payment frequency. Otherwise the payments are not comparable.
Choose your amortization on purpose
With less than 20% down, the Government of Canada says the maximum is 30 years for first-time buyers or new builds, and 25 years in other cases. Longer means smaller payments but more interest overall.
Pick a payment frequency
The Government of Canada lists monthly, semi-monthly, biweekly, weekly, accelerated biweekly and accelerated weekly. Ask how each one changes the interest you pay.
Ask about prepayment privileges
Find out how much extra you can pay each year without penalty, and when. A lump-sum or payment-increase option can shorten your loan.
Ask about portability and assumption
Can you take the mortgage to a new home? Can a buyer take it over? These matter if you might move before the term ends.
Read the information box
Banks must give you key terms in a disclosure statement with an information box. Check the principal, rate, APR, term and penalty sections against the quote.
Avoid these
Common comparison slips
Comparing rates with different terms
A one-year rate and a five-year rate solve different problems. Compare like with like, then decide which term fits your plans.
Ignoring variable-rate mechanics
Ask whether a rate rise changes your payment or only how much goes to principal. The answer affects your monthly budget differently.
Skipping the renewal date
Your term ends long before the loan is paid. Banks must send renewal information at least 21 days before the term ends, but you can shop earlier.
Assuming every penalty is the same
Penalty formulas differ between lenders and products. Ask for a worked example for the exact mortgage on offer.
Questions to ask
Questions to put in writing
Your lender or mortgage broker
- What is the rate, the APR and the total interest over the term?
- How is my prepayment penalty calculated, with an example?
- How much can I prepay each year, and how often?
- Can I port this mortgage if I move?
- What fees apply at setup, discharge or transfer?
Your lawyer or notary
- Does the mortgage commitment match what I was quoted?
- Are there conditions I must meet before funds are released?
- What will the lender register on my title?
FAQ
Common questions
What is the difference between term and amortization?
The term is the length of your current contract, from a few months to five years or more. The amortization is the full payoff period. You will usually renew several times before the loan is gone.
Can I get a 30-year amortization in BC?
With less than 20% down, the Government of Canada says 30 years is available to first-time buyers and buyers of new builds. Otherwise the maximum is 25 years. With 20% or more down, your lender sets the limit.
Is a variable rate riskier?
A variable rate can move during the term, up or down. Ask how a change would affect your payment, and whether your budget could absorb a rise.
What disclosure must a bank give me?
A federally regulated lender must show key terms in an information box. It includes the principal, payments, term, amortization, rate, APR, prepayment privileges and penalty charges.
What is an open mortgage?
An open mortgage lets you pay extra or pay off the loan without a penalty. The Government of Canada notes open mortgages typically have higher rates than closed ones.
A practical example
Compare a realistic change of plans
Ask each provider how the proposed product would work if you sold, made a large extra payment or needed to change the agreement before the term ended.
- Request examples for that particular mortgage.
- Compare the explanation with your expected timeline.
The purpose is to understand flexibility and costs that may not be visible in a rate comparison.
A detail to keep in mind
A general description of mortgage penalties may not describe the product you are being offered.
Official information
Start with these resources, then confirm the details for your property and circumstances.
Government of Canada: choosing a mortgageGovernment of Canada: Getting a mortgage, know your rightsBC Financial Services Authority: Are you ready to purchase?Reference review: October 6, 2026