{"id":1421,"date":"2021-07-30T14:48:12","date_gmt":"2021-07-30T21:48:12","guid":{"rendered":"https:\/\/www.nerdwallet.com\/ca\/?page_id=1421"},"modified":"2024-11-13T12:17:09","modified_gmt":"2024-11-13T20:17:09","slug":"how-does-a-mortgage-work","status":"publish","type":"page","link":"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work","title":{"rendered":"How Does a Mortgage Work in Canada?"},"content":{"rendered":"\n<p class=\"\">About 66% of Canadian households own the home they live in, according to the 2021 Census, and Canadians had more than $1.5 trillion in outstanding mortgage balances on those homes as of November 2024.<a href=\"#sources\" class=\"js-scroll-to\" rel=\"nofollow noopener noreferrer\" target=\"_self\">[1]<\/a> Despite the widespread use of mortgages, these types of loans can be tough to comprehend.&nbsp;<\/p>\n\n\n\n<p class=\"\">If asked to explain how a mortgage works, you might say: \u201cA bank lends you money to buy a home, and you repay it, with interest.\u201d That description isn\u2019t wrong, but there are many other important variables that affect the experience of applying for, obtaining and repaying a mortgage. Having a good grasp on how mortgages work allows you to make better decisions about the mortgage that\u2019s right for you. &nbsp; &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Mortgage basics<\/strong><\/h2>\n\n\n\n<p class=\"\">A mortgage is a loan that\u2019s specifically used to <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/what-is-real-estate\">purchase real estate<\/a>. You must bring some cash to the table \u2014 the <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-much-down-payment-for-a-house\">down payment<\/a> \u2014 but you\u2019ll likely need a mortgage from a financial institution or private lender to cover the balance. Key components of any mortgage include:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\"><strong>Loan amount (principal):<\/strong> The sum you borrow to buy your home.&nbsp;<\/li>\n\n\n\n<li class=\"\"><strong>Repayment period (amortization): <\/strong>The amount of time needed to repay the entire loan amount \u2014 25 years is common.<\/li>\n\n\n\n<li class=\"\"><strong>Interest: <\/strong>The fee lenders charge for lending money. The <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/mortgage-rates-canada\">mortgage interest rate<\/a> you agree to determines the amount of interest you pay.<\/li>\n\n\n\n<li class=\"\"><strong>Mortgage payment: <\/strong>The<strong> <\/strong>amount you regularly make to the lender to repay the loan, plus interest. Mortgage payments often include <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/what-is-property-tax\">property taxes<\/a>, home insurance and <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/what-is-mortgage-insurance\">mortgage insurance<\/a>.<strong> <\/strong>This is usually a monthly payment, but some lenders offer other cadences, such as biweekly.<\/li>\n\n\n\n<li class=\"\"><strong>Mortgage length (term): <\/strong>The amount of time a specific mortgage contract remains in place \u2014 five years is most common. When the term is up, you\u2019ll <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-mortgage-renewal-works\">renew your mortgage<\/a>, which means agreeing to a new mortgage contract for the remaining principal. A mortgage renewal means a new set of terms, including interest rate.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-lightest-green-background-color has-background\"><strong>Key takeaway:<\/strong> You\u2019ll likely agree to several different mortgage contracts during the life of your loan. The terms that work best in one instance may not be the best the next time around.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How mortgage interest rates work<\/h2>\n\n\n\n<p class=\"\">Interest is the cost of borrowing money. Instead of charging a flat dollar-amount, like you\u2019d see on a price tag at a store, lenders calculate the cost with interest rates. The interest rate is applied to the amount you borrow, so if either number increases, you\u2019ll pay more in interest. For example, let\u2019s say the current interest rate is 5%. That means you would pay $5 for every $100 borrowed. This is a very simplified answer as other factors come into play when calculating interest, but you get the idea.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How lenders determine your mortgage interest rate<\/h3>\n\n\n\n<p class=\"\">When you shop for something at a store, the price you see for an item is typically the same for anyone shopping there. However, when you shop for a mortgage, the price or interest rate varies from person to person. That\u2019s because lenders consider risk, or your expected ability to repay the loan, when they offer you an interest rate.&nbsp;<\/p>\n\n\n\n<p class=\"\">To determine your risk level, lenders consider a range of factors, including your <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/minimum-credit-score-for-mortgage-canada\">credit score<\/a>, income and any other debt you have. If your application shows markers of lower risk, you\u2019ll likely be offered lower rates.&nbsp;<\/p>\n\n\n\n<p class=\"\">There\u2019s one additional factor to consider: The interest rate that banks pay to borrow money, called the prime rate, underpins the rates it offers customers. When a bank\u2019s prime rate drops, the rates it offers drop, too. When it rises, as we saw in 2022 and 2023, rates rise. The upshot is that a person with mediocre credit in a period of low prime rates might get a lower rate than a person with great credit who takes out a mortgage when prime rates are high.<\/p>\n\n\n\n<p class=\"has-lightest-green-background-color has-background\"><strong>Key takeaway: <\/strong>Trying to predict interest-rate movement can lead to disappointment. Instead, to ensure you get the best possible rate, focus on what\u2019s in your control: Your credit score, income, other debt and down payment savings.<\/p>\n\n\n<div class=\"c-block-house-ad wp-block-nerdwallet-blocks-house-ad\">\n\n\t\n\t<div class=\"c-block-house-ad__wrapper\">\n\t\t<div class=\"c-block-house-ad__inner\">\n\t\t\t<div class=\"c-house-ad__content-wrapper c-house-ad__content-wrapper__no-image\">\n\t\t\t\t\n\t\t\t\t<h5 class=\"c-block-house-ad__title\">Best Mortgage Rates in Canada<\/h5>\n\t\t\t\t\t\t\t\t\t<p class=\"c-block-house-ad__content\">\n\t\t\t\t\t\tCompare Canada\u2019s top mortgage lenders and brokers side-by-side to find the best mortgage rates to suit your needs.\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t<div class=\"c-block-house-ad__cta wp-block-button\"><a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/mortgage-rates-canada\" target=\"_self\" class=\"c-block-house-ad__cta-button nw-cta track-click-mon wp-block-button__link wp-element-button\" data-placement=\"Promotional banner\">Explore Now<\/a><\/div>\t\t\t<\/div>\n\n\t\t\t\t\t\t\t<div class=\"c-block-house-ad__image-wrapper\">\n\t\t\t\t\t<div class=\"c-block-house-ad__image\">\n\t\t\t\t\t\t<img decoding=\"async\" class=\"c-block-house-ad__icon-img\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/07\/Mortgage-32-1.svg\" alt=\"Ad Icon\" style=\"max-width: 200px; max-height: 200px;\" \/>\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What happens to your interest rate after you sign a mortgage?<\/strong><\/h2>\n\n\n\n<p class=\"\">When getting a mortgage, you have two options: agree to pay a set rate for the entire mortgage term or pay whatever the prevailing rate is from month to month.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><\/td><td><strong>Fixed rate<\/strong><\/td><td><strong>Variable Rate<\/strong><\/td><\/tr><tr><td>Interest rate details<\/td><td>Your rate is locked for the entire mortgage term, even if market rates change.<\/td><td>Your rate adjusts if market rates change.<\/td><\/tr><tr><td>Pros<\/td><td>Your mortgage payment is dependable.<\/td><td>If rates fall during the mortgage term, your interest payments decrease.<\/td><\/tr><tr><td>Cons<\/td><td>If market rates fall, you don\u2019t benefit.&nbsp;<\/td><td>If rates rise, you\u2019ll pay more in interest.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Rules about paying your mortgage off early<\/h2>\n\n\n\n<p class=\"\">There are multiple reasons you might want some flexibility in your mortgage contract. Here are two:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\">You\u2019re expecting an inflow of cash during your mortgage\u2019s term and want to be able to pay off some or all of your mortgage.&nbsp;<\/li>\n\n\n\n<li class=\"\">You want to renegotiate your mortgage.<\/li>\n<\/ul>\n\n\n\n<p class=\"\">Most homeowners have closed-term mortgages, which don\u2019t have much flexibility. If you pay off your mortgage beyond a predetermined limit, you\u2019ll pay <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/prepayment-penalty-cost-to-end-a-mortgage-early\">penalties<\/a>.&nbsp;<\/p>\n\n\n\n<p class=\"\">If you want repayment flexibility, look for an <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/open-vs-closed-mortgage\">open-term mortgage<\/a>. These allow you to repay your mortgage without penalty. This flexibility does have a cost, though: Open mortgages have higher rates than closed mortgages.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Mortgage contracts: How long they last&nbsp;<\/h2>\n\n\n\n<p class=\"\">Your mortgage term is how long the contract with your mortgage lender lasts. Most people go with a five-year term, but terms can range from one to 10 years. A longer term usually costs more, but the rate you get is locked in for longer. A short term is appealing for the lower rates, but when your term is up, you\u2019ll need to renew at whatever the rates are at that time.<\/p>\n\n\n\n<p class=\"\">Don\u2019t confuse your term length with amortization. Amortization is the total time needed to pay off the entire mortgage principal \u2014 a length of time that\u2019s likely to span multiple mortgage contracts. Most new homeowners get a mortgage with an amortization period of 25 years. New government rules have made 30-year amortizations available to more people, especially first-time buyers, but it\u2019s unclear whether <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/new-mortgage-rules-help-or-harm\">these changes<\/a> will make home ownership more affordable.<\/p>\n\n\n\n<p class=\"has-lightest-green-background-color has-background\"><strong>Key takeaway: <\/strong>Focusing on the lowest available rate isn\u2019t always the best choice when it comes to choosing a mortgage term. Sometimes other factors, like term length, matter just as much. For example, when rates were at historic lows, locking in a longer term could have been a great choice, even if the rate was a bit higher compared to shorter terms. Conversely, if your credit score is high enough to be approved for a mortgage but not good enough for the lowest rates, you might opt for a shorter term in hopes of improving your financial profile and securing a better rate later. Work with your lender or broker to understand your options.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Getting approved for a mortgage<\/strong><\/h2>\n\n\n\n<p class=\"\">To get approved for a mortgage, a lender will focus on:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\"><strong>Your credit score.<\/strong> Lenders want to ensure that you\u2019re <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/minimum-credit-score-for-mortgage-canada\">creditworthy<\/a>.<\/li>\n\n\n\n<li class=\"\"><strong>Down payment savings.<\/strong> You need to have <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-much-down-payment-for-a-house\">at least 5% of the purchase price<\/a> saved to qualify for a mortgage.<\/li>\n\n\n\n<li class=\"\"><strong>Secured income.<\/strong> A <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/letter-of-employment-for-mortgage\">letter of employment<\/a> proves that you have a steady income and will be able to keep up with mortgage payments.<\/li>\n\n\n\n<li class=\"\"><strong>Other debt. <\/strong>If you have student loans, a car payment or other forms of debt, you will have less flexibility to make mortgage payments.<\/li>\n<\/ul>\n\n\n\n<p class=\"\">If your financial situation has any red flags \u2014 a low credit score or an inconsistent income history, for example \u2014&nbsp; you may still have <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/best-mortgage-lenders-for-bad-credit\">mortgage options<\/a>.&nbsp;<\/p>\n\n\n\n<p class=\"has-lightest-green-background-color has-background\">\ud83e\udd13 <strong>Nerdy Tip: <\/strong>If you\u2019re looking into mortgages for the first time, look at lenders that offer easy online pre-qualification. Getting pre-qualified will help you estimate what kind of mortgage and loan amount you could be approved for. Pre-qualification is non-binding and doesn\u2019t affect your credit score. Before you begin making offers on homes, you\u2019ll want to get <a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/what-is-mortgage-pre-approval\">pre-approved<\/a>.<\/p>\n\n\n\n<div class=\"c-block-citation wp-block-nerdwallet-blocks-accordion\" id=\"sources\">\n\t<div class=\"c-block-accordion-wrapper\">\n\t\t<div class=\"c-block-accordion__header\">\n\t\t\t<h2 class=\"c-block-accordion__title\">\n\t\t\t\tArticle Sources\t\t\t<\/h2>\n\t\t<\/div>\n\t\t<div class=\"c-block-accordion-list\">\n\t\t\t<div class=\"c-block-accordion-item \">\n\t\t\t\t<div class=\"c-block-accordion-item__header\">\n\t\t\t\t\t<div class=\"c-block-accordion-item__title\">\n\t\t\t\t\t\tWorks Cited\t\t\t\t\t<\/div>\n\t\t\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"23\" height=\"23\" fill=\"\" viewBox=\"0 0 256 256\"><path d=\"M213.66,101.66l-80,80a8,8,0,0,1-11.32,0l-80-80A8,8,0,0,1,53.66,90.34L128,164.69l74.34-74.35a8,8,0,0,1,11.32,11.32Z\"><\/path><\/svg>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"c-block-accordion-item__content\">\n\t\t\t\t\t<div class=\"wp-block-nerdwallet-blocks-accordion-item\">\n\t\t\t\t\t\t<ol class=\"card-citation-lists\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<li class=\"citation-list-item\">\n\t\t\t\t\t\t\t\t\t<div class=\"citation-list-item__wrapper\">\n\t\t\t\t\t\t\t\t\t\t<span>Statistics Canada<\/span>, &#8220;<a href=\"https:\/\/www150.statcan.gc.ca\/t1\/tbl1\/en\/tv.action?pid=9810024101#:~:text=Total%20%2D%20Housing%20indicators,9%2C787%2C420\" rel=\"nofollow noopener noreferrer\" target=\"_blank\">https:\/\/www150.statcan.gc.ca\/t1\/tbl1\/en\/tv.action?pid=9810024101#:~:text=Total%20%2D%20Housing%20indicators,9%2C787%2C420<\/a>,&#8221; accessed November 12, 2024.\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/ol>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<div class=\"nwb-authors nwb-authors__footer wp-block-nerdwallet-blocks-authors-card\">\n\t<div class=\"nwb-authors__wrapper\">\n\t\t<h4 class=\"nwb-authors__title\">\n\t\t\tAbout the Author\t\t<\/h4>\n\n\t\t\t\t\t<div class=\"nwb-authors__content\">\n\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/kurt-woock\">\n\t\t\t\t\t\t<img\n\t\t\t\t\t\t\tclass=\"nwb-authors__image\"\n\t\t\t\t\t\t\tsrc=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2023\/07\/kurt-woock-100x100.jpeg\"\n\t\t\t\t\t\t\twidth=\"120\" height=\"120\"\n\t\t\t\t\t\t\talt=\"Kurt Woock photo\"\n\t\t\t\t\t\t\/>\n\t\t\t\t\t<\/a>\n\t\t\t\t\n\t\t\t\t<div>\n\t\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/kurt-woock\">\n\t\t\t\t\t\t<strong>Kurt Woock<\/strong>\n\t\t\t\t\t<\/a>\n\n\t\t\t\t\t<div class=\"nwb-authors__bio\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t<p>Kurt Woock started writing for NerdWallet in 2021 and has covered mortgages, cryptocurrency, electric vehicles and small business software. Prior to joining NerdWallet, Kurt worked for the Colorado Public Employees&#039;&hellip;<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/kurt-woock\" title=\"Read more about Kurt Woock\">\n\t\t\t\t\t\t\t<span>Read more about Kurt Woock and explore their articles<\/span>\n\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t<\/div>\n<\/div>\n\n\n\n\t<section class=\"c-block-card-grid container\"\n\t\t\t>\n\t\t\t\t\t<h4 class=\"c-block-card-grid__title\">\n\t\t\t\tDIVE EVEN DEEPER\t\t\t<\/h4>\n\t\t\n\t\t<div class=\"c-block-card-grid-scroll column-four\">\n\t\t\t<div class=\"c-block-card-grid-scroll__column\">\n<div id=\"post-1436\" class=\"c-block-card post-1436 page type-page status-publish has-post-thumbnail hentry content-classification-mortgages topic-buying-or-selling-real-estate cluster-buying-real-estate\">\n\t<div class=\"c-block-card__inner c-block-card__inner--large\">\n\t\t\t<a class=\"c-block-card__image-wrapper\" href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/first-time-home-buyer-guide\" rel=\"bookmark\">\n\t\t<img loading=\"lazy\" width=\"460\" height=\"191\" decoding=\"async\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/08\/First-Time-Home-Buyer-Guide-e1627939673963-460x191.jpg\" class=\"c-block-card__image wp-post-image\" alt=\"First-Time Home Buyer In Canada? Here&#8217;s What You Need To Know\" \/>\t<\/a><!-- .c-entry__thumbnail -->\n\t\t\t<div class=\"c-block-card__content-wrapper\">\n\t\t\t\n<h4 class=\"c-block-card__title\">\n\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/first-time-home-buyer-guide\" rel=\"bookmark\" class=\"c-block-card__title-link\">\n\t\tFirst-Time Home Buyer In Canada? Here&#8217;s What You Need To Know\t<\/a>\n<\/h4>\n\n\t<div class=\"c-block-card__content\">\n\t\t<p>A little knowledge about the housing market, mortgages and incentive programs can help you afford your first home.<\/p>\n\t<\/div>\n\n\t<div class=\"c-block-card__authors\">\n\t\t\t\t<div class=\"nw-written-by-layout-inline\">\n\t\t\t\n\t\t\t<div class=\"nw-written-by-layout-inline--wrapper\">\n\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/clay-jarvis\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/03\/IMG_20220329_114424-150x150.jpg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Clay Jarvis<\/a><a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/kurt-woock\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2023\/07\/kurt-woock-40x40.jpeg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Kurt Woock<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div><!-- .c-card__content-wrapper -->\n\t<\/div>\n<\/div><!-- #post-1436 -->\n<\/div><div class=\"c-block-card-grid-scroll__column\">\n<div id=\"post-23435\" class=\"c-block-card post-23435 page type-page status-publish has-post-thumbnail hentry content-classification-mortgages topic-mortgage-calculator cluster-all-mortgage-calculators\">\n\t<div class=\"c-block-card__inner c-block-card__inner--large\">\n\t\t\t<a class=\"c-block-card__image-wrapper\" href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/canada-mortgage-affordability-calculator\" rel=\"bookmark\">\n\t\t<img loading=\"lazy\" width=\"435\" height=\"290\" decoding=\"async\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2023\/02\/GettyImages-1369972502-435x290.jpg\" class=\"c-block-card__image wp-post-image\" alt=\"Calculator: How Much Mortgage Can You Afford?\" \/>\t<\/a><!-- .c-entry__thumbnail -->\n\t\t\t<div class=\"c-block-card__content-wrapper\">\n\t\t\t\n<h4 class=\"c-block-card__title\">\n\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/canada-mortgage-affordability-calculator\" rel=\"bookmark\" class=\"c-block-card__title-link\">\n\t\tCalculator: How Much Mortgage Can You Afford?\t<\/a>\n<\/h4>\n\n\t<div class=\"c-block-card__content\">\n\t\t<p>Use our mortgage affordability calculator to see how your interest rate, down payment and debt ratios affect your housing budget.<\/p>\n\t<\/div>\n\n\t<div class=\"c-block-card__authors\">\n\t\t\t<\/div>\n\t\t<\/div><!-- .c-card__content-wrapper -->\n\t<\/div>\n<\/div><!-- #post-23435 -->\n<\/div><div class=\"c-block-card-grid-scroll__column\">\n<div id=\"post-60419\" class=\"c-block-card post-60419 page type-page status-publish has-post-thumbnail hentry content-classification-mortgages topic-mortgage-basics cluster-qualifying-for-a-mortgage\">\n\t<div class=\"c-block-card__inner c-block-card__inner--large\">\n\t\t\t<a class=\"c-block-card__image-wrapper\" href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-much-mortgage-70000-salary\" rel=\"bookmark\">\n\t\t<img loading=\"lazy\" width=\"435\" height=\"290\" decoding=\"async\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2024\/03\/GettyImages-1371116757-435x290.jpg\" class=\"c-block-card__image wp-post-image\" alt=\"How Much Mortgage Can I Get With a $70,000 Salary?\" \/>\t<\/a><!-- .c-entry__thumbnail -->\n\t\t\t<div class=\"c-block-card__content-wrapper\">\n\t\t\t\n<h4 class=\"c-block-card__title\">\n\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-much-mortgage-70000-salary\" rel=\"bookmark\" class=\"c-block-card__title-link\">\n\t\tHow Much Mortgage Can I Get With a $70,000 Salary?\t<\/a>\n<\/h4>\n\n\t<div class=\"c-block-card__content\">\n\t\t<p>A person making $70,000 may be able to afford a mortgage around $400,000. The mortgage amount you&#8217;ll qualify for ultimately depends on your credit score, debt and current interest rates.<\/p>\n\t<\/div>\n\n\t<div class=\"c-block-card__authors\">\n\t\t\t\t<div class=\"nw-written-by-layout-inline\">\n\t\t\t\n\t\t\t<div class=\"nw-written-by-layout-inline--wrapper\">\n\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/kurt-woock\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2023\/07\/kurt-woock-40x40.jpeg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Kurt Woock<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div><!-- .c-card__content-wrapper -->\n\t<\/div>\n<\/div><!-- #post-60419 -->\n<\/div><div class=\"c-block-card-grid-scroll__column\">\n<div id=\"post-1530\" class=\"c-block-card post-1530 page type-page status-publish has-post-thumbnail hentry content-classification-mortgages topic-mortgage-basics cluster-qualifying-for-a-mortgage\">\n\t<div class=\"c-block-card__inner c-block-card__inner--large\">\n\t\t\t<a class=\"c-block-card__image-wrapper\" href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-much-down-payment-for-a-house\" rel=\"bookmark\">\n\t\t<img loading=\"lazy\" width=\"460\" height=\"191\" decoding=\"async\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/08\/How-Much-Do-I-Need-for-a-Down-Payment-on-a-House-e1628722032669-460x191.jpg\" class=\"c-block-card__image wp-post-image\" alt=\"How Much for a Down Payment on a House?\" \/>\t<\/a><!-- .c-entry__thumbnail -->\n\t\t\t<div class=\"c-block-card__content-wrapper\">\n\t\t\t\n<h4 class=\"c-block-card__title\">\n\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-much-down-payment-for-a-house\" rel=\"bookmark\" class=\"c-block-card__title-link\">\n\t\tHow Much for a Down Payment on a House?\t<\/a>\n<\/h4>\n\n\t<div class=\"c-block-card__content\">\n\t\t<p>Your minimum down payment depends on the lender, but you are required to put at least 5% down on a home under $500,000.<\/p>\n\t<\/div>\n\n\t<div class=\"c-block-card__authors\">\n\t\t\t\t<div class=\"nw-written-by-layout-inline\">\n\t\t\t\n\t\t\t<div class=\"nw-written-by-layout-inline--wrapper\">\n\t\t\t\t<a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/clay-jarvis\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2022\/03\/IMG_20220329_114424-150x150.jpg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Clay Jarvis<\/a><a href=\"https:\/\/www.nerdwallet.com\/ca\/author\/kurt-woock\" class=\"author url fn\" rel=\"author\"><img loading=\"lazy\" decoding=\"async\" width=\"32\" height=\"32\" src=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2023\/07\/kurt-woock-40x40.jpeg\" class=\"avatar avatar-32 photo wp-post-image\" alt=\"\" \/>Kurt Woock<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div><!-- .c-card__content-wrapper -->\n\t<\/div>\n<\/div><!-- #post-1530 -->\n<\/div>\t\t<\/div>\n\t<\/section>\n\n","protected":false},"excerpt":{"rendered":"<p>A mortgage is a loan to buy a home. Once it&#8217;s paid off, you own the home free and clear.<\/p>\n","protected":false},"author":4,"featured_media":1422,"parent":106,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"page-templates\/article-sidebar.php","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"apple_news_api_created_at":"","apple_news_api_id":"","apple_news_api_modified_at":"","apple_news_api_revision":"","apple_news_api_share_url":"","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":"[]","apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":"","_nw_pros_cons_block_schema":""},"content-classification":[16],"topic":[114],"cluster":[222],"pp_author":[880],"acf":[],"apple_news_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Does a Mortgage Work in Canada? - NerdWallet Canada<\/title>\n<meta name=\"description\" content=\"A mortgage is a loan that\u2019s specifically used to purchase a home that is paid over many years. There are different types and interest rates.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Does a Mortgage Work in Canada? - NerdWallet Canada\" \/>\n<meta property=\"og:description\" content=\"A mortgage is a loan that\u2019s specifically used to purchase a home that is paid over many years. There are different types and interest rates.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work\" \/>\n<meta property=\"og:site_name\" content=\"NerdWallet Canada\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/NerdWallet\" \/>\n<meta property=\"article:modified_time\" content=\"2024-11-13T20:17:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/07\/How-does-a-mortgage-work-in-Canada-e1627681511769.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1901\" \/>\n\t<meta property=\"og:image:height\" content=\"789\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@NerdWallet\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"7 minutes\" \/>\n\t<meta name=\"twitter:label2\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data2\" content=\"Kurt Woock\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work\",\"url\":\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work\",\"name\":\"How Does a Mortgage Work in Canada? - NerdWallet Canada\",\"isPartOf\":{\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/#website\"},\"datePublished\":\"2021-07-30T21:48:12+00:00\",\"dateModified\":\"2024-11-13T20:17:09+00:00\",\"description\":\"A mortgage is a loan that\u2019s specifically used to purchase a home that is paid over many years. There are different types and interest rates.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work#breadcrumb\"},\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.nerdwallet.com\/ca\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Mortgages\",\"item\":\"https:\/\/www.nerdwallet.com\/ca\/mortgages\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"How Does a Mortgage Work in Canada?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/#website\",\"url\":\"https:\/\/www.nerdwallet.com\/ca\/\",\"name\":\"NerdWallet Canada\",\"description\":\"NerdWallet, make all the right money moves.\",\"publisher\":{\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.nerdwallet.com\/ca\/?s={search_term_string}&submit=Search\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-CA\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/#organization\",\"name\":\"NerdWallet Canada\",\"url\":\"https:\/\/www.nerdwallet.com\/ca\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-CA\",\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/06\/NerdWallet-bug.svg\",\"contentUrl\":\"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/06\/NerdWallet-bug.svg\",\"width\":1,\"height\":1,\"caption\":\"NerdWallet Canada\"},\"image\":{\"@id\":\"https:\/\/www.nerdwallet.com\/ca\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/NerdWallet\",\"https:\/\/twitter.com\/NerdWallet\",\"https:\/\/www.instagram.com\/NerdWallet\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"How Does a Mortgage Work in Canada? - NerdWallet Canada","description":"A mortgage is a loan that\u2019s specifically used to purchase a home that is paid over many years. There are different types and interest rates.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work","og_locale":"en_US","og_type":"article","og_title":"How Does a Mortgage Work in Canada? - NerdWallet Canada","og_description":"A mortgage is a loan that\u2019s specifically used to purchase a home that is paid over many years. There are different types and interest rates.","og_url":"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work","og_site_name":"NerdWallet Canada","article_publisher":"https:\/\/www.facebook.com\/NerdWallet","article_modified_time":"2024-11-13T20:17:09+00:00","og_image":[{"width":1901,"height":789,"url":"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/07\/How-does-a-mortgage-work-in-Canada-e1627681511769.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_site":"@NerdWallet","twitter_misc":{"Est. reading time":"7 minutes","Written by":"Kurt Woock"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work","url":"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work","name":"How Does a Mortgage Work in Canada? - NerdWallet Canada","isPartOf":{"@id":"https:\/\/www.nerdwallet.com\/ca\/#website"},"datePublished":"2021-07-30T21:48:12+00:00","dateModified":"2024-11-13T20:17:09+00:00","description":"A mortgage is a loan that\u2019s specifically used to purchase a home that is paid over many years. There are different types and interest rates.","breadcrumb":{"@id":"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work#breadcrumb"},"inLanguage":"en-CA","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.nerdwallet.com\/ca\/mortgages\/how-does-a-mortgage-work#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.nerdwallet.com\/ca\/"},{"@type":"ListItem","position":2,"name":"Mortgages","item":"https:\/\/www.nerdwallet.com\/ca\/mortgages"},{"@type":"ListItem","position":3,"name":"How Does a Mortgage Work in Canada?"}]},{"@type":"WebSite","@id":"https:\/\/www.nerdwallet.com\/ca\/#website","url":"https:\/\/www.nerdwallet.com\/ca\/","name":"NerdWallet Canada","description":"NerdWallet, make all the right money moves.","publisher":{"@id":"https:\/\/www.nerdwallet.com\/ca\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.nerdwallet.com\/ca\/?s={search_term_string}&submit=Search"},"query-input":"required name=search_term_string"}],"inLanguage":"en-CA"},{"@type":"Organization","@id":"https:\/\/www.nerdwallet.com\/ca\/#organization","name":"NerdWallet Canada","url":"https:\/\/www.nerdwallet.com\/ca\/","logo":{"@type":"ImageObject","inLanguage":"en-CA","@id":"https:\/\/www.nerdwallet.com\/ca\/#\/schema\/logo\/image\/","url":"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/06\/NerdWallet-bug.svg","contentUrl":"https:\/\/www.nerdwallet.com\/ca\/wp-content\/uploads\/sites\/2\/2021\/06\/NerdWallet-bug.svg","width":1,"height":1,"caption":"NerdWallet Canada"},"image":{"@id":"https:\/\/www.nerdwallet.com\/ca\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/NerdWallet","https:\/\/twitter.com\/NerdWallet","https:\/\/www.instagram.com\/NerdWallet"]}]}},"_links":{"self":[{"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/pages\/1421"}],"collection":[{"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/comments?post=1421"}],"version-history":[{"count":49,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/pages\/1421\/revisions"}],"predecessor-version":[{"id":77100,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/pages\/1421\/revisions\/77100"}],"up":[{"embeddable":true,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/pages\/106"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/media\/1422"}],"wp:attachment":[{"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/media?parent=1421"}],"wp:term":[{"taxonomy":"content-classification","embeddable":true,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/content-classification?post=1421"},{"taxonomy":"topic","embeddable":true,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/topic?post=1421"},{"taxonomy":"cluster","embeddable":true,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/cluster?post=1421"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.nerdwallet.com\/ca\/wp-json\/wp\/v2\/pp_author?post=1421"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}