You can start saving for your down payment:

• By setting aside money each month just as you would a regular mortgage payment
• By opening a RRSP Regular Investment Plan™ to help you save tax free
• With a cash gift from a parent or relative

Let CIBC help you with a strategy to reach your goal of buying your first home sooner.

The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

What’s the difference?

• Conventional mortgage: means your down payment is at least 20% of the purchase price.
• High-ratio mortgage: means your down payment is less than 20% of the purchase price.

High ratio mortgages must be insured by a third party such as the Canada Mortgage and Housing Corporation (CMHC), Genworth Financial Canada or Canada Guaranty and require you to pay an insurance premium.

The insurance premium:

• Will depend on the amount you are borrowing and the percentage of your down payment (Usually, mortgage default insurance premiums range between 0.6% and 3.15% of your total mortgage amount)
• Can be added to the principal balance and paid off as part of your mortgage, or paid off in a lump sum at the time of purchase (may be subject to provincial sales tax which cannot be added to mortgage amount)

The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

• Consider your annual household income. This is a key factor when determining how much of a mortgage you can afford. In addition to calculating your annual household income, consider any income changes that may impact your ability to make your payments. For example, if there are currently two major income sources within your household, would you still be able to afford your mortgage if one was removed? What if a child comes into the picture and your partner decides to become a stay-at-home parent? Consider all factors before deciding.
• Consider your down payment. Currently, you are required to have at least a 5% down payment when buying a house. The size of your down payment is one factor in determining the size of mortgage you can afford.
• Consider your debt. When determining “How much can I afford?” one of the other important factors to take into account is the amount of debt you currently have. The lower your debt-to-income ratio, the more money you’ll likely have to put towards your mortgage. In addition, your debt level will also help to determine how large of a mortgage you will qualify for.
• Consider your amortization period. If you are simply trying to keep your regular mortgage payments low in order to comfortably fit the payment into your budget, you will probably want to apply for a mortgage with a longer amortization period. However, if you don’t mind a somewhat larger regular mortgage payment in order to save money on interest in the long run, you may want to consider a shorter amortization period.
• Consider your closing costs. Closing costs are an often overlooked expense that will definitely help determine how much money you can afford as a down payment.
• Consider your property taxes, various types of homeowner’s insurance such as damage, title etc and additional expenses. Lastly, there are a few additional expenses that may impact how much money you have to put towards your mortgage each month. Expenses like property taxes, homeowner’s insurance and even things like home maintenance should be factored in before making your final decision. These costs are often overlooked but should be considered before settling on the home of your dreams.

We will helps you answer the question “How much can I afford?”

Buying a home is a big financial decision. When you start out by knowing what mortgage you can comfortably afford and what houses fit into your price range, you will be prepared to find the ideal house for your situation. We also makes it easy, by offering helpful mortgage calculators like the Mortgage Affordability Calculator that lets you enter your information to find out the price range that’s right for you.

For additional information about how much mortgage you can afford or to complete an application by phone, contact a CIBC Mortgage Advisor at 1-866-525-8622.
The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

Important home buying questions to ask yourself:

• Is this home the right size? Are there enough bedrooms and bathrooms?
• Is the yard big enough? Does it have a finished basement?
• Is it in your general price range?
• What is the condition of the home? How old is the furnace and wiring? Take a look at the roof and the foundation.
• Take a look at the neighbourhood. What’s the condition of other homes in the area? Does the community appeal to you?
• Is there access to public transit and major roads? Are there good public facilities like schools, hospitals, shopping and recreation facilities in the area?
• Is this an older, more established neighbourhood or a new development?
• How do the municipal taxes compare to those in other areas? Are there any development plans that will affect the neighbourhood?
• Are there any zoning bylaws that might affect you – such as your ability to have a home office in your house?
• Does the property have the potential to increase in value?

Search Canadian real estate listings on The Canadian Real Estate Association’s Multiple Listing Service.
The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

Types of mortgages

• Closed mortgages: Closed mortgages have prepayment options of up to 20% of the original mortgage amount. If you decide to pay out, renegotiate or refinance before the end of the term of a closed mortgage, prepayment costs will be applied.
• Open mortgages: An open mortgage can be repaid at any time throughout the term, either in full or partially without any prepayment costs. Provides flexibility until you are ready to lock into a closed term.
• Convertible mortgages: A convertible mortgage is similar to a closed mortgage, but gives you the option of converting to a longer, closed mortgage at any time without prepayment costs. With this option you can make an annual prepayment up to 10% of the original mortgage amount.

Types of mortgage interest rates

• Fixed rate mortgages: A fixed interest rate remains the same throughout the entire term. This option allows your payment to remain constant so you know exactly how much you will pay every month and what amount you will have paid off at the end of the term. Learn more about fixed mortgage rates.
• Variable rate mortgages: A variable interest rate will fluctuate with the Prime rate throughout the mortgage term. This impacts the amount of principal that you pay off each month as your mortgage payment will remain constant. Learn more about variable rate mortgages.

Mortgage payment options:

Mortgage payments can be made weekly, bi-weekly, semi-monthly and monthly.

Borrowing Solutions

With a Home Power Plan you can include a  line of credit or combine a line of credit and a mortgage, in order to consolidate all of your personal credit under one simple, low-interest and secured borrowing solution, which can be adjusted to meet your changing needs.

Mortgage refinance options

A mortgage refinance option, known at the banks as a Home Power Mortgage™, allows you to borrow additional money on your mortgage, so you can afford the things you’ve always wanted. For a low price, it can save you money and help you consolidate your debt into one convenient payment.

Credit bureaus create a detailed report containing information such as personal identification, your credit history, public records with an effect on your credit and a list of parties you have authorized to access this information. For example, if you pay your bills on time or if you repay a loan, you will be in good standing with the credit bureau. So, when it’s time to borrow, a lending institution will know that you are credit worthy.

How do you get your credit rating?

You have the right to see the information in your credit bureau file, which includes your credit rating. Contact one of Canada’s credit bureaus to receive a copy of your credit report by mail, free of charge. For a fee, you can also view your credit report online. Check your report carefully – if there are errors in the payment information on your credit report, you should send a letter to the credit-reporting agency requesting rectification of your records.

For more information, contact one of the credit bureaus directly at:

TransUnion Canada: 1-866-525-0262

Equifax Canada: 1-800-465-7166

How do I establish a good credit rating?

The easiest way to establish a good credit rating is to pay your bills on time. Another way is to get various forms of credit, such as a credit card, loan, or a line of credit. If you use your credit responsibly and at least make your minimum payments, you can develop a history of good credit.
The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

Mortgage principal

The mortgage principal is the amount of the original mortgage, less any payments made towards it. This does not include interest, which is calculated on the remaining principal balance and paid with your regular payments.

Mortgage interest

Generally, mortgage interest costs are front-loaded, so that that interest comprises a much larger percentage of your regular mortgage payment at the beginning of the life of the mortgage than toward the end.

Property Tax

This may be part of your regular mortgage payment. The property taxes that are based on the official assessment of the market value of your property. These taxes are ordinarily paid in installments. CIBC will hold these payments in escrow until they are due as the respective city/municipality will send the bills directly to CIBC.

Mortgage life insurance

For convenience mortgage life insurance premiums are added to your regular mortgage payment. Should you pass away and your claim is approved, the outstanding principal balance of your mortgage on the day you pass away would be reduced or paid off (up to a maximum of $750,000).
The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

Take a look at how practical and affordable owning a home can be.

Find out if you should rent or own with the Rent vs. Own Calculator.
Monthly mortgage payment is based on a $150,000-$250,000 mortgage, with 5% down payment at an interest rate of 5.90% per year (rate as of October 5, 2005), on a 5-year closed term and a 25-year amortization. Mortgage payment amount does not include property taxes, insurance premiums, utilities and common expenses. The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

A Pre-Approved Mortgage Certificate gives you:

A guaranteed interest rate for 90 days from the effective date of the Pre-Approval Certificate. You signal to sellers that you’re a serious about your home buying intentions which may provide leverage in the negotiation process, especially when there are multiple parties bidding for the property.

CIBC strives to simplify mortgage pre-qualification with 3 basic steps:

1. Request a Pre-approval online. This is a quick and easy process that should only take a few minutes. Once you’ve completed the application and agreed to the legal terms, select Submit.
2. Next, a  Mortgage Representative will contact you within 3 business days to answer any questions you might have about your application.
3. CIBC will mail you a Pre-Approved Mortgage Certificate. That’s all there is to it.

Once you’ve selected the house you intend to buy, you will need to complete a full application to secure your mortgage.*

*All mortgage applicants must meet  lending criteria.
The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

Once accepted, an Offer to Purchase is a legally binding agreement between you and the vendor. Along with your mortgage agreement, this is one of the most important documents you’ll sign.

It locks you into the conditions of the purchase, so make sure your interests are protected by discussing your Offer to Purchase with your lawyer or notary prior to signing.

Checklist: What to include in your home offer

• Your proposed purchase price.
• A list of items in the house (called chattels) to be included in the purchase price. For example, appliances, window coverings, and certain furniture items might be negotiated into the purchase price.
• Amount of your deposit.
• Financial details. For example, how the balance of the purchase price will be paid.
• Closing date. This is the date you will take possession of the house (usually 30 or 60 days from the date of the agreement).
• Time period for which the offer is valid.
• Conditions of the offer. You might want to make your offer conditional on arranging for financing, a building inspection, or the results of a survey. Make sure the offer can be cancelled if any of your conditions are not met and always put a time limit on the conditions. Keep in mind that a firm offer – one with no conditions – is usually more attractive to the vendor. But remember that you need to feel comfortable with the offer yourself.

Your home offer is accepted

Congratulations, once your Offer to Purchase is accepted, it’s time to contact a advisor.

The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.

About your employment

• Confirmation of your current employment and income
• Confirmation of previous employment (if required)
• Confirmation of any additional income

About your finances

• Your  Pre-Approved Mortgage Certificate, if applicable
• Confirmation of your down payment (if the down payment is a gift, a gift letter from the donor is required specifying that the funds do not need to be repaid)
• List of assets and liabilities
• Bank account number and transit number for payments

About your new home

• A copy of the accepted Purchase and Sale Agreement
• A copy of the real estate listing
• Full address of property, including legal description and postal code
• Lawyer’s name, address, postal code, telephone and fax number
• Heating costs, property tax estimates and condo fees (usually available on the real estate listing)
• Well and septic certificates (for rural properties)

You’ll pay some costs at the beginning of the home-buying process and others, known as closing costs or disbursements, when your home purchase is finalized.

Hidden costs that could add up when you buy your first home

Don’t forget to consider general expenses such as moving, upgrades, and home decorating costs as well.
The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.