FAQ
Frequently Asked Questions
Frequently Asked Questions
Here are some answers to commonly asked questions to help you navigate the mortgage process confidently.
General FAQ
What is the difference between a Mortgage Specialist at a Bank and a Mortgage Agent/Broker?
Think of it like ice cream! A Mortgage Specialist at a bank offers only plain vanilla in a cup—limited rates and products from one source. A Mortgage Agent/Broker, however, offers over 40 flavors with unlimited toppings and choice of cones! They work with multiple lenders to present tailored solutions based on your needs.
Do I pay fees to work with a Mortgage Agent/Broker?
Most mortgage transactions don’t charge fees. In rare cases, like Alternative or Private mortgages, a fee might apply, but it’s always disclosed upfront.
How do I find the best rates?
By working with an indi Mortgage Agent, who compares options across multiple lenders to ensure you get the best rate aligned with your goals.
Mortgage Dictionary
What is an “Insured” mortgage?
An “Insured” mortgage applies when your down payment is less than 20%, and the mortgage is insured by a Default Insurance Provider. These are only for owner-occupied properties.
Why do I pay a default insurance premium?
This protects the lender in case you default on payments. The premium is a one-time fee calculated as a percentage of the total mortgage and included in your mortgage balance.
What is a “Conventional” or “Uninsured” mortgage?
This applies when you provide a down payment of 20% or more, so default insurance isn’t required.
How much do I need for a minimum down payment?
Up to $500,000: 5%
Above $500,000 to $1,499,999: 5% on the first $500,000 plus 10% on the difference above
$1,500,000 and above: 20%
Can I put less than 20% down for my second home?
Yes, as long as it’s your primary residence.
What is a mortgage “term”?
The length of time your mortgage rate is guaranteed. Terms range from 1 to 10 years for fixed rates and usually 5 years for variable rates.
What is “Amortization”?
The total duration to pay off your mortgage. Maximum:
Insured mortgages: 25 years
(With the exception of First Time Homebuyers OR any buyer of a New Construction home who can go up to 30 years)
Conventional mortgages: 30 years
What’s the difference between “Fixed” and “Variable” rate terms?
Fixed: The rate stays the same for the term.
Variable: The rate fluctuates with the Prime Rate, staying a set percentage above or below it.
What is the Prime Rate?
The interest rate lenders use to set Variable Rate mortgages or Home Equity Lines of Credit (HELOCs).
How does the Bank of Canada’s Overnight Lending Rate affect the Prime Rate?
When the Overnight Lending Rate moves, the Prime Rate typically moves in the same direction.
What is an “Accelerated” payment frequency?
A payment option that helps reduce your mortgage balance faster, cutting your amortization by about 2.5 years on average.
What You Can and Can’t Do with a Mortgage
What does a “Closed” mortgage term mean?
A Closed term restricts prepayments and may incur penalties if you break it early.
What is an “Open” mortgage term?
An Open term allows unrestricted prepayments without penalties, though it usually has higher rates.
How much extra can I put toward my mortgage?
Most lenders allow annual prepayments of 15–20% of the original balance, plus the ability to increase regular payments by 15–20%.
What is the penalty to break a mortgage early?
Penalties depend on the lender and are either:
Three months’ simple interest
Interest Rate Differential (IRD)
What is an Interest Rate Differential?
The IRD compares your original rate to the lender's current rate for the remaining term length. This calculation varies by lender.
When would I pay a penalty to my lender?
If you:
Sell your property
Switch lenders mid-term
Break your mortgage for a new term
Already Have a Mortgage?
How do I access equity in my home?
Your hard-earned equity can be unlocked through options like refinancing, a Home Equity Line of Credit (HELOC), or a second mortgage.
Need more answers?
Contact an indi Mortgage Agent for personalized guidance. We’re here to simplify every step of the process!
It’s not a calculator, it’s a conversation
Getting the best mortgage is not just about the rate. An indi mortgage expert can show you why the type of mortgage product you choose can make all the difference. The potential to save thousands of dollars while securing a competitive rate? Sign us up.