5 Questions You Should Ask Your Broker

Like most home buyers, your goal is to find the best mortgage rate.


It’s important to ask as many questions as you can to ensure you’re getting the best mortgage product for your needs.

You're probably wondering: which questions should I be asking?

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We’re going to discuss 5 questions you should ask your bank, mortgage specialist or broker to make sure you get the best mortgage product.

Should I go with a variable or fixed rate mortgage?

One of the most commonly asked questions, and rightfully so!

A fixed rate product is the most used mortgage by clients in Canada, however, variable rates are trending as the favourable option for 2021. With a fixed rate mortgage, your mortgage interest rate and principal payment will remain the same for the entire term of your mortgage.  

With a variable rate, your principal payment stays the same, however the interest portion of your mortgage can fluctuate based on the increase or decrease of the prime rate.  

Three reasons why clients are choosing variable:  

1. Historically variable rates have outperformed fixed rates, allowing clients to save more throughout their mortgage term. 

2. The penalty to exit your variable rate mortgage is capped at 3months of interest vs fixed rate penalties can be over $10,000.  

3. You can switch your variable rate mortgage into a fixed rate mortgage at any time, however, not the other way around.  

What are the benefits of working with a mortgage broker?

There are a variety of benefits of working with a mortgage broker:

·       At KV Capital, we have access to +30 lenders

·       A simplified application process

·       Lower interest rates

·       Faster results

We work for you, not the bank, which allows us to provide you options, unbiased advice, and a licensed mortgage expert to walk you through the process.

What happens if I break my mortgage early?

Unfortunately, you will have to pay a penalty. How much will those penalties cost will depend on whether or not your mortgage is on a variable or fixed rate, as well as who your lender is and how much time you have left in your current mortgage contract term.

Examples of the penalties you may pay are:

·       Prepayment penalties

·       Administration fee

·       Appraisal fee

·       Re-investment fees (if you are trying to purchase a new home)

What closing costs should I budget for?

Some expenses are one-time costs, while others are on-going commitments. It is important to take the time to factor the following costs into your budget.

1.      Proof of Down Payment / Closing Costs

2.      Lawyer(Solicitor) Fees – aka “Closing Costs”

3.      Title Insurance and/or Real Property Report (RPR)

4.      Realtor Fees

5.      Home Inspection

6.      Property Taxes

7.      Utilities

For more information regarding closing costs, read our blog Understanding the Costs of Homeownership.

How much should my down payment be?

According to the Government of Canada, your minimum down payment corresponds to the purchase price of your home.

Any questions outstanding? Want a second opinion?

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