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Mortgages

For Homeowners and Buyers

Whether you’re buying your first home, renewing a mortgage or tapping into your homes equity, finding the right mortgage can be overwhelming. With countless mortgage products from various lenders, there’s no “one size fits all” solution.

At mfactory, we provide a personalized mortgage journey detailing every step of the way, ensuring you secure the mortgage that’s the perfect fit for your needs.

The Broker Advantage

A bank is limited to its own mortgage, a broker has access to multiple banks, ensuring more options

Broker Advantage

One Application

A single, convenient application submitted to multiple lenders, saving you time.

Multiple Lenders

Access to a variety of lenders, giving you more loan options than a single bank.

Reduced Credit Checks

One application eliminates the need for each lender to request a separate credit report.

Lower Rates

Secure lower interest rates and better terms by comparing multiple offers.

Licensed Professionals

Unbiased experts working for you, not the lender.

No Cost

There is no cost for our services.

Mortgages

Home Buyers

Buying a Home can be overwhelming, that’s why we work with everyone involved, from the Realtor, Home Inspector, Lawyer, Parents, and anyone involved in your mortgage journey.

First-Time Homebuyers

Second Homes

Relocating

Turn-Key Homes

New Construction

Low Down Payment

Rental Properties

Cottages

New-to-Canada

Self-Employed

Continue to Home Buyers

Mortgages

Homeowners

Is your mortgage working for you? Whether you are looking to Refinance and tap into your homes equity or Renew, we provide all of your options in an easy convenient manner with no obligations.

Streamlined Process

Save Time & Money

Lower Payments

Access Equity

Consolidate Debts

Lower Rates

Continue to Homeowners
Home Owners

Mortgage FAQ

Check out our FAQ page or

Submit your own question

here.

A mortgage is a loan used to purchase a property or used to access equity against the value of a property you already own. It is a secured loan, meaning the property itself serves as collateral.

When you take out a mortgage, you agree to repay the lender over time through scheduled payments, which typically include:

  • Principal – The original loan amount.
  • Interest – The cost of borrowing, based on a set rate.

If you fail to repay the loan, the lender has the right to foreclose on the property, meaning they can take ownership and sell it to recover the debt.

No, a Home Equity Line of Credit (HELOC) is not the same as a mortgage loan, but they are both ways to borrow against your home’s value. Here’s how they differ:

Mortgage Loan:

  • A lump sum loan used to purchase a home or refinance an existing mortgage.
  • Fixed payment schedule (e.g., 15, 20, or 30 years).
  • Includes principal and interest payments
  • Typically a lower interest rate than a HELOC.

Home Equity Line of Credit (HELOC):

  • A revolving credit line that lets you borrow against your home’s equity as needed.
  • Works like a credit card: you can borrow, repay, and borrow again during the draw period.
  • Typically has a variable interest rate, meaning payments can change.
  • Used for renovations, debt consolidation, or other expenses.

Key Difference:

  • Mortgages are a one-time loan with structured payments.
  • HELOCs are a flexible credit line you can borrow from repeatedly.

A mortgage broker is a licensed professional who acts as an intermediary between borrowers and lenders to help secure a mortgage loan.

Instead of working for a single bank or lender, mortgage brokers have access to multiple loan products from different financial institutions, allowing them to find the best rates and terms for their clients.

What Does a Mortgage Broker Do?

  1. Assess Borrower Needs – Evaluates a client’s financial situation, credit history, and homeownership goals.
  2. Find Loan Options – Shops around for mortgage products that match the borrower’s needs.
  3. Negotiate Terms – Works to secure competitive interest rates and favorable loan conditions.
  4. Assist with Paperwork – Helps the borrower complete and submit necessary loan applications.
  5. Coordinate with Lenders – Acts as the main point of contact between the borrower and the lender throughout the loan approval process.

Benefits of Using a Mortgage Broker:

  1. Access to Multiple Lenders – More loan options than going directly to one bank.
  2. Potential Cost Savings – Can negotiate better rates and terms.
  3. Convenience – Handles the legwork of shopping for loans and managing paperwork.
  4. Expert Advice – Provides guidance on loan types and qualification requirements.

Open Mortgage

  • Short term, temporary mortgage.
  • Allows you to make extra payments or pay off the loan in full at any time without penalties.
  • Offers flexibility if you plan to sell your home soon.
  • Higher interest rates compared to closed mortgages.

Closed Mortgage

  • Lower interest rates than an open mortgage.
  • Provides predictable payments over a set term.
  • Limits prepayments—large extra payments or paying off the loan early may incur penalties.

The mortgage amortization and mortgage term are two key aspects of a mortgage, but they refer to different things:

Mortgage Amortization
This is the total length of time it takes to fully pay off your mortgage if you follow the agreed-upon payment schedule. It’s typically 15 to 30 years and determines how much of each payment goes toward the principal and interest over time.

Mortgage Term
This is the length of time your current mortgage agreement is in effect before you need to renew or refinance. A term can range from a few months to 10 years, with 5 years being common. At the end of each term, you either pay off the remaining balance, renew with your lender, or switch to a new lender.

Key Difference:

  • Amortization is the total repayment period, while
  • Term is the period for which your current mortgage agreement is in place before renewal.

The main difference between a conventional mortgage and a high-ratio mortgage is the size of the down payment and whether mortgage insurance is required.

1. Conventional Mortgage

  • The borrower makes a down payment of at least 20% of the home’s purchase price.
  • Since the loan-to-value (LTV) ratio is 80% or less, mortgage default insurance is not required.
  • Lower overall cost since there are no insurance premiums.
  • Usually has more flexible terms and conditions.

2. High-Ratio Mortgage

  • The borrower makes a down payment of less than 20% of the home’s purchase price.
  • The LTV ratio is greater than 80%, meaning the borrower is financing more of the purchase with the mortgage.
  • Requires mortgage default insurance (e.g., CMHC, Sagen, or Canada Guaranty in Canada), which protects the lender in case of default.
  • Insurance premiums increase the total cost of borrowing.
  • Often comes with lower interest rates compared to conventional mortgages because the lender has reduced risk due to the insurance.

A high-ratio mortgage applies when your down payment is less than 20% of the purchase price. In these cases, the mortgage must be insured by CMHC, Sagen, or Canada Guaranty.

If you plan to live in the second property, you can qualify for a high-ratio mortgage. However, if the property is intended as a rental, a minimum 20% down payment is required.

Example Scenarios:

  1. You purchase a second home, cottage, or condo for personal use (not a rental). A high-ratio mortgage is allowed.
  2. You buy a new home and convert your current home into a rental. Your new home can still qualify for a high-ratio mortgage with a down payment under 20%.

Also referred to as; Mortgage Default Insurance, Mortgage Loan Insurance, Default Insurance, and CMHC Insurance.

Mortgage default insurance protects lenders in case a borrower defaults (fails to make payments) on their mortgage. It does not protect the borrower—it is required by lenders when the down payment is less than 20% of the home’s purchase price (high-ratio mortgage).

In Canada, mortgage loan insurance is provided by three main insurers:

  1. Canada Mortgage and Housing Corporation (CMHC).
    The largest and most well-known provider. CMHC is a government-backed insurer offering standard and specialized mortgage insurance programs.

  2. Sagen (formerly Genworth Canada).
    Is a private mortgage insurer, offering flexible insurance options, including programs for self-employed borrowers and newcomers to Canada.

  3. Canada Guaranty.
    A private mortgage insurer, competing with CMHC and Sagen, offering various insurance products.

If you’re buying a home with a down payment of less than 20%, your broker and lender will automatically arrange for mortgage default insurance through one of the three approved providers: CMHC, Sagen, or Canada Guaranty. You do not need to apply for it yourself.

These four types of insurance serve different purposes in protecting homeowners, lenders, and other stakeholders. Here’s how they differ:

  1. Mortgage Insurance
    • Purpose: Protects the lender if the borrower defaults on the mortgage.
    • Who Requires It? Mandatory for high-ratio mortgages (less than 20% down payment).
    • Who Benefits? The lender (not the borrower).
    • Providers in Canada: CMHC, Sagen, and Canada Guaranty.

  2. Home Insurance (Property Insurance)
    • Purpose: Protects the homeowner against damages to the property (fire, theft, flooding, etc.)
    • Who Requires It? Lenders require it before approving a mortgage, but it also benefits the homeowner.
    • Who Benefits? The homeowner and lender.
    • Covers: The structure, personal belongings, and sometimes liability in case of injury on the property.

  3. Title Insurance
    • Purpose: Protects the homeowner and lender against title-related issues, such as fraud, errors in public records, or disputes over property ownership.
    • Who Requires It? Usually optional but recommended when buying a home.
    • Who Benefits? The homeowner and/or lender.
    • Covers: Title fraud, survey errors, zoning issues, and undisclosed liens.

  4. Creditor Insurance (Mortgage Protection)
    • Purpose: Helps pay off or cover mortgage payments if the borrower dies, becomes disabled, or loses their job.
    • Who Requires It? Optional, but lenders often offer it.
    • Who Benefits? The borrower’s family or estate.
    • Covers: Mortgage payments in case of death, disability, or job loss.
Type of Insurance
Protects
Required
Covers
Premiums Paid By
Mortgage Insurance

Lender

Yes (if down payemnt <20%)

Lender losses if borrower defaults on mortgage.

Homeowner (premium may be added to the principal at purchase)

Home Insurance (Property Insurance)

Homeowner & Lender

Yes

Property damage, liability

Homeowner

Title Insurance

Homeowner & Lender

Lender will likely require it. Discuss with lawyer. (Recommended)

Title fraud, errors, liens.

Homeowner

Creditor Insurance (Mortgage Protection)

Homeowner & Family

Optional (Recommended, separate from lender)

Mortgage balance and/or payments and optional property tax payments in case of death, disability or job loss.

Homeowner

A mortgage charge is a legal claim that a lender places on a property when issuing a mortgage. It gives the lender the right to take ownership of the property if the borrower fails to repay the loan.

There are two types of mortgage charges, a Standard Charge Mortgage and a Collateral Charge Mortgage.

Feature
Standard
Collateral
Registration Amount

Registered for the exact mortgage amount borrowed.

Registered for more than the borrowed amount (e.g., 125% of home value).

Additional Borrowing

Requires refinancing.

Allows additional borrowing with the same lender.

Transfer/Renew to Another Lender

Easier and usually free at renewal.

Harder and often requires legal fees to discharge and re-register.

Legal Fees

Standard legal fees for setup and refinancing.

Potential additional legal fees if switching lenders.

Flexibility

Less flexible—must refinance for more funds.

More flexible—can borrow more under the same registration.

Best For

Most borrowers, keeping options opened.

Homeowners will low loan-to-value.

A home appraisal is a professional assessment of a property’s market value, conducted by a certified appraiser. Lenders use appraisals to ensure the home’s value supports the mortgage amount being requested.

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