A Mid-Pandemic Mortgage Checkup?
Anita Groves • May 6, 2020
If you’ve been sitting on the sidelines waiting to see the full impact of COVID-19 on the economy before asking any pressing questions about your financial situation, now might be a good time for a mid-pandemic mortgage checkup!
Here is a list of questions that have come up in the last couple of weeks.
- Should I make an application to defer my mortgage payments?
- I have already deferred my mortgage payments, how will this impact me down the line?
- My job is on hold, and I’m collecting assistance, but my mortgage term is up for renewal, what are my options?
- I’d like to refinance my mortgage to increase my on hand, can this be done?
- I have a variable rate mortgage, is now a good time to lock in?
- How does my mortgage rate compare to the rates available on the market now?
- Are rates going up, or down, or both? Should I wait, or act now?
- I’m looking to buy a new property, will anyone give me a mortgage?
- I paid off my mortgage years ago; I have a property, can I borrow money using my house to help my kids?
If you’d like answers to any of these questions or have different questions of your own, please contact me anytime to discuss your mortgage and your personal financial situation. I’d be more than happy to discuss all your options.
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When you’re buying a home, two terms often cause confusion: deposit and down payment . While they’re related, they serve very different purposes in the homebuying process. Here’s what you need to know. What Is a Deposit? A deposit is the money you provide when you make an offer on a property. Think of it as a show of good faith that proves you’re serious about purchasing. How it works : Typically, you provide a certified cheque or bank draft that your real estate brokerage holds in trust. If your offer is accepted, the deposit remains in trust until the deal moves forward. If negotiations fall through, the deposit is refunded. Connection to your down payment : Once the sale is finalized, your deposit becomes part of your total down payment. Why it matters : The amount is negotiable, but a larger deposit can make your offer more attractive in a competitive market. Keep in mind, however, that if you back out after conditions are removed, you risk losing your deposit. What Is a Down Payment? Your down payment is the amount you contribute toward the purchase price of your home when securing a mortgage. Minimum requirement : In Canada, the minimum down payment is 5% of the home’s purchase price. Anything less than 20% requires mortgage default insurance. Sources : Down payments can come from your savings, the sale of another property, RRSP withdrawals (through the Home Buyers’ Plan), a gift from family, or even borrowed funds. Example: How They Work Together Imagine you’re buying a $400,000 home with a 10% down payment ($40,000). When you make your offer, you provide a $10,000 deposit . Once conditions are met, that deposit is transferred to your lawyer’s trust account. At closing, you add the remaining $30,000 to complete your full down payment. The lender provides the rest—$360,000—through your mortgage. The Bottom Line Your deposit shows commitment and secures your offer, while your down payment is what makes the mortgage possible. Together, they work hand in hand to get you into your new home. 📞 If you’d like clarity on deposits, down payments, or any other part of the mortgage process, let’s connect. I’d be happy to walk you through it step by step.
The Bank of Canada announced today that it is maintaining its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. For Canadian homeowners, buyers, and anyone with a mortgage on the horizon — here's what you need to know.
