Personal
Home Bank accounts
Credit cards
Borrowing
Mortgages
Savings and investments
Insurance
Wealth Management
Home
CLOSE
FAQ icon
FAQ icon
FAQ icon
Icône FAQ

Frequently Asked Questions

Mortgages

On this page

Top questions

Tips for achieving your goals

Money bag icon
Airplane icon
Airplane and globe icon
Family icon
Palm tree icon
Suitcase icon

Definitions

Amortization

The amortization period is the total number of years you will need to completely pay off your mortgage. The most common amortization period is 25 years. This is also the longest period allowed if your downpayment is less than 20% and your loan needs to be insured by a mortgage insurer like CMHC.

It's often advantageous to choose a shorter amortization period, because by paying off your mortgage more quickly you’ll save on interest.

To see how choosing a different amortization period affects the total amount you pay, use our calculator.

Term

The mortgage term is the period during which your mortgage contract and the interest rate it specifies are in effect. For example, the amortization period for your mortgage might be 25 years, while the term might be three years. At the end of the three years, you have to renew your mortgage for another term. This is an opportunity for you to renegotiate your interest rate and conditions.

Downpayment

The downpayment is the initial amount you pay when you first purchase your home. The mortgage loan covers the rest of the purchase price.

The minimum downpayment is:

  • 5% for properties $500,000 or less
  • 10% for the portion in excess of $500,000
  • 10% if the property has more than two dwellings (triplex, quadruplex, apartment building)
  • 20% for properties $1 million and above
  • 20% when you finance part of your purchase with a home equity line of credit

Did you know that you can use your RRSPs to make a downpayment? Learn more about the Home Buyers’ Plan (HBP).

Fixed rate and variable rate

fixed rate remains the same for the duration of the mortgage term. This means that your payments will stay the same too.

With a variable mortgage rate, the interest rate and payment amount can go up or down depending on market fluctuations.

When you take out a mortgage loan you can choose between a fixed rate, a variable rate or a combination of the two.

home equity line of credit comes with a variable rate.

The made-to-measure mortgage has a variable rate for the line of credit portion, and for the loan portion you can choose between a fixed rate, a variable rate or a combination of the two.

View our current mortgage rates.

Capped variable rate

By opting for a capped variable rate when you take out your mortgage, you can protect yourself against rate increases. The rate you pay will never exceed the capped rate. For example, if you choose to cap the rate at 5%, you can be sure that your rate will never be higher than this.

  Variable rate Capped variable rate
Interest rate

Prime rate + 00%1
Adjusted monthly

Prime rate1 + 0.25%
Adjusted monthly

Term

5-year closed term

5-year closed term

Preapproval

pre-approval establishes your borrowing capacity based on a number of factors, including your credit score. The pre-approval offered by National Bank establishes a mortgage amount for which you qualify and guarantees an interest rate for 90 days. It’s a commitment made by the Bank to the client.

General

What is a mortgage?

A mortgage loan, or mortgage, is a legal agreement in which the house you buy is used as a security for the repayment of the funds you borrow. You must repay the loan amount plus interest.

How does mortgage financing work?

Mortgage financing allows you to borrow money to purchase a property. You repay the loan in instalments, which include interest.

We offer two financing solutions: mortgage loans and our All‑In‑One home equity line of credit™.

Are you a first-time buyer? Here are six things to do before you buy.

Need a little help? Find an advisor.

What does a mortgage advisor do?

Your mortgage advisor helps you choose the financing solution that best suits your needs. They're by your side at every step of the homebuying process and can help you get pre‑approved for a mortgage as early as your very first meeting.

What is a first mortgage?

A first mortgage is one where the mortgage lender’s claim over the secured property (in this case, the house) has priority over the borrower’s other creditors. Some lenders may agree to a second mortgage, or even to lending without security over the property. To take advantage of National Bank’s rates, your loan must be secured by a first mortgage.

If a couple divorces or separates, what happens to their mortgage?

There are a few options:

  1. The couple can sell their property and split the equity between them.
  2. One spouse can assume the mortgage (i.e., accept sole responsibility for it)*.
  3. One spouse can buy out the other and refinance the property (get a new mortgage)*.

*Subject to approval by National Bank.

What will happen to my mortgage if I die or become critically ill or disabled?

If you can no longer pay your mortgage, your co-borrower or your family will have to take over the payments. If they cannot afford to pay, they will be forced to sell the house.

This is why it’s important to protect yourself and your loved ones by taking out mortgage loan insurance. The insurance covers your insured payments in the event of disability, critical illness or death, depending on the coverage you choose.

What is CMHC and Genworth Financial Canada?

If your downpayment is less than 20% of the price of your home, you’ll need to purchase mortgage loan insurance. This insurance protects the Bank in the event that you default on your loan. The insurance is provided by one of these recognized mortgage insurers:

  • The Canada Mortgage and Housing Corporation (CMHC) is Canada’s authority on housing and mortgage insurance.
  • Genworth Financial Canada, is Canada’s largest private residential mortgage insurer.

What is mortgage security?

When you borrow money to purchase a home, you agree to use your home as collateral for the loan. This agreement is known as a “mortgage” (or “hypothec” in Quebec). If you default on your mortgage loan, the lender can take legal action to gain possession of your home or sell it.

The charge is registered at the land registry office. Each province has its own rules regarding the different types of mortgages and how they are registered.

Mortgage solutions

Mortgage loan or line of credit—which one is right for me?

mortgage loan lets you borrow the money you need to buy your home, which is then used as collateral for the loan. You repay the loan in instalments, which include interest.

The All‑In‑One is a home equity line of credit. You can use it to purchase your home and then access your repaid principal to finance other projects without having to apply for another loan.

Not sure which is right for you? If you’re having trouble choosing between the two, there’s another option: our made-to-measure mortgage combines a loan portion and a line of credit portion. Speak with your mortgage advisor for more information.

Magic wand icon

Tip

Get $750 or $1,500 in cashback when you sign up for an All-In-One home equity line of credit.2

What term should I choose for my fixed-rate mortgage loan?

It all depends on what your plans are and how much risk you are willing to accept. Think carefully, because once you sign your rate will be fixed for the duration of the term.

If you’re planning to remain in your home for many years, and you don’t want to renegotiate your rate, a longer term may suit your needs best. A longer term generally means a higher rate but lower risk, because you’re protected from potential interest rate hikes.

If you’re planning on selling your property, or you want the opportunity to renegotiate the rate and loan conditions, a shorter term is a better option for you. A higher tolerance for risk is required in this case: while you may save money if interest rates fall, remember that rates may also go up.

If you’re still unsure, ask your mortgage advisor for help choosing the best option for you.

What’s the difference between a conventional loan and an insured loan?

conventional loan is a mortgage with an initial downpayment of at least 20%.

If the downpayment is less than 20%, an insured loan is required. This means that the loan must be insured by one of the recognized mortgage loan insurers, Genworth Financial Canada or the Canada Mortgage and Housing Corporation (CMHC).

How does the All‑In‑One line of credit work?

The All‑In‑One is a home equity line of credit. You can use it to purchase your home and then access your repaid principal to finance other projects without having to apply for another loan. Up to 65% of the value of the property can be in the form of a line of credit. You must provide a downpayment of at least 20% of the value of the property, and the rest of the financing, if applicable, must be in the form of a mortgage loan.

With this line of credit you can integrate your bank accounts ($6 per month per account) and save even more by consolidating your other loans with the same interest rate.

As you pay off your loan, the repaid principal becomes automatically available for other projects. You can access your funds at an ABM via your online bank with your debit card and more.

How can I get financing for a property that needs renovations?

You have three options:

  1. Use the equity from the property, either by taking some of your downpayment and putting it toward the renovations, or by using the funds available via your All‑In‑One home equity line of credit.
  2. Finance the renovations at the time of the purchase by adding their estimated costs to your mortgage.
  3. Apply for a Home Improvement Line of Credit in addition to your mortgage loan to borrow $5,000 or more for your renovation project.

What about self-employed workers?

If you’re self-employed or a small-business owner, you may not be able to meet the standard proof of income requirements. If you’ve been in business for at least two years and can provide evidence of sound financial and credit management, you can finance or refinance your home with our mortgage for the self‑employed.

Should I choose an open or closed fixed-rate mortgage loan?

This table compares the features of open and closed mortgage loans.

  Open Closed
What does it mean?

You can pay off your mortgage more quickly without penalty.

There is normally a prepayment charge if you make extra payments before the end of the term. Accelerated payments can be made without penalty under certain conditions.

A good option if:

You are planning to sell the property or make a large payment, for example if you expect to receive an inheritance

You are planning to keep the property until the end of the term.

Rate

See all rates

Often higher

Often lower

Applying for financing

Am I better off buying or renting?

Can’t decide whether you should buy or rent? Take our quiz to find out which option suits you best.

Don’t forget to check out our 6 mortgage calculators, which let you try out different scenarios to help choose the best options for you.

How much can I borrow to buy a home?

Before you start browsing the real estate listings, you’re going to need to work out how much you can borrow for your mortgage. In just a few clicks, our calculator can help you get an idea of the amount you can afford.

Don’t forget to check out our 6 mortgage calculators, which let you try out different scenarios to help choose the best options for you.

How do I estimate my monthly mortgage payments?

It’s easy! Run your numbers through our calculator and in just a few clicks you’ll have an idea of how much you'd be paying per month.

Don’t forget to check out our 6 mortgage calculators, which let you try out different scenarios to help choose the best options for you.

My downpayment is less than 20% of the value of the house I want to buy. What should I do?

If your downpayment is between 5% and 20% of the purchase price, your bank must take out mortgage loan insurance with either Genworth Financial Canada or the Canada Mortgage and Housing Corporation (CMHC), and you will have to pay a mortgage loan insurance premium in addition to your loan payments.

Did you know that you can use your RRSPs to make a downpayment? Learn more about the Home Buyers’ Plan (HBP).

Am I eligible for the Home Buyers’ Plan (HBP)?

To take advantage of the HBP, you must:

  • Be considered a first-time home buyer
  • Buy or build an eligible home in Canada
  • Occupy the property as your primary residence for the first year
  • Withdraw funds that have been in an RRSP for at least 90 days

Don't have an RRSP? An RRSP loan or line of credit can help you take advantage of the HBP.

How do I use my RRSPs to buy my first home?

You can use your RRSP to buy a home through the Home Buyers' Plan (HBP), which allows you to withdraw funds from your RRSP to use as a downpayment and repay the amount withdrawn later.

You can withdraw up to $25,000 per borrower tax-free, and you have 15 years to pay it back, interest-free. You’re basically lending yourself the money!

How can an RRSP loan or line of credit help me qualify for the HBP?

Finance your downpayment with an RRSP loan or line of credit5 to take advantage of the HBP.

Here's how:

  1. Take out an RRSP loan or line of credit.
  2. Put the money you borrowed in your RRSP (up to your contribution limit) and keep it there for 90 days. Interest charges may apply.
  3. Withdraw the amount you need from your RRSP. Note that you will need to pay back your loan in full when you make this withdrawal.
  4. Get a tax refund for contributing to your RRSP and put it toward your downpayment.
  5. Note that you have up to 15 years to pay back any funds you withdraw from your RRSP, starting after the first year.

What are the steps in the mortgage application process?

There are four main steps in the mortgage application process: preparing for the meeting with your mortgage advisor; gathering documents; submitting the application itself; and signing the official documents upon purchase.

To learn more about the application process, see Applying for a mortgage.

What documents do I need?

If you have a meeting coming up with your mortgage advisor, plan ahead to make the most of your time.

We’ve put together a list of the documents you’ll need: Preparing for your meeting.

What are the eligibility conditions?

During your first meeting, your mortgage advisor will ask you about your employment situation, your downpayment, your credit rating, and so on.

Are you a self-employed worker or business owner who is unable to provide standard proof of income documents? Our mortgage for the self-employed could be just what you’re looking for.

Do you have a poor credit rating or no credit history? Find out what it means to be a co‑borrower.

What is the difference between pre-approval and pre-qualification?

Pre-qualification allows you to make an approximate assessment of your borrowing capacity to purchase a property based on your income.

Pre-approval, on the other hand, establishes more precisely your borrowing capacity based on a number of factors including your credit score. It certifies that National Bank will lend you the money for the purchase, under certain conditions, and protects the loan rate against a rise for 90 days.

Free of charge and under no obligation to take out a loan afterwards, pre-approval shows sellers and your real estate broker you’re a serious buyer.

Thinking of becoming an owner? Get pre-approved online now in just a few clicks.

How can I apply for a mortgage pre-approval online?

Sign in to your online bank to apply for a mortgage pre-approval online in just a few clicks. Then, go to the Mortgage pre-approval tab of the Products and services section and click Apply now.

Not yet subscribed to our online bank? Please use this link to get pre-approved online.

Questions? Benefit from the support of our mortgage specialists anytime by calling us at 1 877-330-3021.

Magic wand icon

Tip!

If you had to quit the pre-approval application form before completing it, the information entered will be saved. You will be able to access it from your online bank and complete it in the next 30 calendar days.

Can I make my downpayment online?

Absolutely. You can deposit your downpayment directly into your notary’s account using your online bank. It’s completely secure and as easy as paying a bill.

Simply ask your notary for a coupon for voucher downpayment with a unique reference number. Then, add Assyst Paiement from the list of suppliers to your online bank, along with the number indicated on the voucher. The notary will receive the payment in 72 hours or less.

Refinancing and renewal

My mortgage term is coming to an end. How do I renew it?

When it comes time to renew your mortgage, call us at 1‑877‑281‑0144 and leave a message including your loan number. A member of our mortgage renewal team will be pleased to call you back. They’re available Monday to Friday from 9:00 a.m. to 8:30 p.m. and Saturday from 10:00 a.m. to 4:00 p.m. (Eastern Time).

How long before the end of the term do I need to renew my mortgage?

renewal is an agreement on the conditions for a new term (duration, interest rate, payment frequency, etc.) once the current term is up.

You don't need to wait until the end of your term to renew your mortgage. By renewing early, you may be able to lock in an attractive rate. Call us now at 1‑877‑281‑0144 to talk about it.

Has your term expired? Contact your advisor as soon as possible, or call us on the number above.

What is mortgage refinancing?

Mortgage refinancing lets you borrow against the equity in your home. Refinancing allows you to borrow up to 80% of the estimated value of your property, minus the balance of your existing mortgage.

This can be an attractive option, because it provides a new source of credit to help finance your projects.

Good to know: If the value of your home has gone up over time, your home equity will also have increased.

How do I transfer my mortgage?

If you want to switch banks, sometimes you can transfer your existing mortgage instead of creating a new mortgage. In this case, the debts secured by the original mortgage must be repaid to the first lender. For help with your individual situation, don’t hesitate to contact your mortgage advisor.

Managing my mortgage

How can I pay off my mortgage faster?

Are you looking to pay off your closed mortgage more quickly? There are four ways to do it: increase your payment frequency, increase the amount of your payments, make additional payments, or make a prepayment. Learn more about accelerated mortgage repayment.

What is the cost of prepaying my mortgage?

There are three ways to find out:

Can I skip or delay a payment if my finances are stretched?

Unfortunately that’s not possible. However, if at some point you think you might have problems paying, contact your mortgage advisor to discuss solutions that could help.

Can I change my payments?

You’ll have to wait until the end of your term to change the payment conditions.

But with an All‑In‑One line of credit, you’re free to decide how much to repay each month. Only interest and insurance, if applicable, must be paid monthly.

You can access this feature by signing in to your online bank

Can I make a payment on principal?

To help you pay off your mortgage faster, you’re allowed to pay off up to 10% of the original principal once per calendar year. It’s up to you whether you make your payment on principal in one or several payments. You can do it by signing in to your online bank

How can I avoid prepayment charges?

Start by reading your mortgage contract carefully before you sign, and if you have any questions, don’t hesitate to ask your mortgage advisor. Here are some strategies to help you avoid charges:

  • Take advantage of your prepayment privileges each year.
  • Wait until the end of your term to prepay.
  • When it's time to renew your mortgage, think carefully about all your options.

To learn more about optimizing your payments, read our advice on accelerated mortgage repayment.

I’m selling my home. What happens to my mortgage?

You can either transfer or break your mortgage. If you choose to break your contract and you have a closed mortgage, you may have to pay a prepayment charge. There may also be a charge if you transfer your mortgage to another lender before the end of your term.

With an open mortgage, you can make a partial or full prepayment with no penalties.

Where can I find my mortgage statement?

If you’ve signed up for online statements, you can view your mortgage statement by visiting the old version of your online bank.

For more information, read the My online bank FAQ.

How do I view my mortgage transactions online?

To view your transaction statements online, sign-in to the old version of your online bank.

For more information, read the My online bank FAQ.

The transaction statements for your mortgage loan or home equity line of credit are normally sent by mail. Only the balance as of the last payment appears in your online bank.

Conventional vs. collateral mortgage

What is the difference between a collateral and conventional mortgage?

There are two types of mortgages: conventional and collateral. National Bank provides collateral mortgages.

  Collateral mortgage Conventional mortgage7
Secured debt with option to borrow additional funds
  • Used to secure one or more present or future debts
  • No need to register a new morgage to secure additional fund8
  • No legal fees
  • Traditionally used to secure a mortgage to purchase a property
  • A new mortgage will need to be registered if you want to borrow additional funds
  • There are legal costs to registering the new mortgage and discharging the old mortgage
Amount registered
  • Can be greater than the actual amount of the mortgage loan9
  • No credit terms are registered
  • Generally registered for the actual amount of the mortgage loan
  • Registered with credit terms
Option to transfer ("subrogation" in Quebec)
  • Generally, the new lender must agree to a new mortgage, and the original mortgage must be discharged
  • There are legal costs involved in registering a new mortgage and discharging the old one
  • Any debts secured by the original mortgage must generally be repaid to the first lender
  • Usually possible when additional funds are not requested
  • There are legal fees for registering the transfer10
  • No need to repay other debt prior to the transfer
Discharging the mortgage
  • Possible once all the debts secured by the mortgage have been repaid
  • At the borrower's request
  • Possible once the mortgage loan has been repaid in full
  • Automatic or at the borrower's request depending on the lender and province


For more information, see our brochure Information on the types of mortgages available for purchasing a residential property. You can also visit the Canadian Bankers Association website.

What amount is registered for each mortgage type?

Collateral mortgage

The maximum amount secured by the mortgage and the maximum interest rate are registered. The mortgage can be registered for an amount greater than the amount borrowed to secure future borrowing needs. For example, if your home costs $400,000 but you only need a loan for $320,000, the mortgage can be registered for up to $400,000.

The lender and borrower sign a credit agreement, separate from the mortgage, setting out the credit terms. The applicable interest rate, the amount borrowed and the credit terms are set out in the various credit agreements signed between the borrower and the lender.

Conventional mortgage

Unlike a collateral mortgage, this type of mortgage is registered with credit terms. The registered amount is generally the amount being borrowed. For example, if your home costs $400,000 but you only need a loan for $320,000, the mortgage will be registered for $320,000.

What are secured debts and the additional funds option

Collateral mortgage

This type of mortgage can be used to secure your current and future borrowing needs. You will be able to obtain additional loans later on up to the registered amount of the mortgage without having to grant a new mortgage every time. You won't have to pay the legal fees involved in creating and registering a new mortgage.

You can obtain additional funds to finance projects other than the purchase of the property. However, these funds are not granted automatically. The borrower must first requalify based on current credit standards and obtain the lender's approval.11

Conventional mortgage

Traditionally, this type of mortgage is only granted to secure the repayment of a mortgage loan used to purchase a property.

You will be required to take out a new mortgage loan in order to borrow more money. You will need to pay the legal fees involved in creating and registering a new mortgage, unless your lender agrees to assume these costs. You must first qualify based on credit standards in effect.

Is there an option to transfer the mortgage to another lender ("subrogation" in Quebec)?

Collateral mortgage

If you want to switch lenders, you may be able to transfer the mortgage rather than creating a new one. If the new lender doesn’t accept the request to transfer your existing collateral mortgage, you will have to pay legal fees to discharge your existing mortgage and register a new mortgage with the new lender.12

Any debts secured by the original mortgage must generally be repaid to the first lender.

This is the type of mortgage provided by National Bank.

Conventional mortgage

If you want to switch lenders13, you can usually transfer your existing mortgage rather than registering a new one. Only the loan balance can be transferred. You will not be able to borrow additional funds under this mortgage. You will need to pay legal fees and possibly administration fees.

If the mortgage is not transferred to the new lender, you will need to pay fees to discharge your existing mortgage and register a new one.

What is involved in discharging a mortgage?

Discharging a mortgage means recording a mortgage discharge with the registry to release the Bank’s collateral hold on your home.

Generally, you will pay the cost to register the discharge and possibly a discharge fee to your lender.

Collateral mortgage

To discharge a collateral mortgage, you must inform the lender and repay all the secured debt.

Conventional mortgage

A conventional mortgage can only be discharged once the loan has been repaid in full. The mortgage is discharged at the borrower's request or automatically, depending on the lender and province.

Tips for achieving your goals

Money pouch icon

My finances

See our tips and tricks for managing your finances more effectively.

See our tips

Airplane icon

My travel plans

Everything you need to know to plan your next vacation with peace of mind.

See our tips

Airplane and globe icon

My new life in Canada

Take advantage of our offers for newcomers to Canada and get all the information you need to manage your finances.

See our tips

Family icon

My family

We can help you power your ideas so you can turn your family plans into treasured memories.

See our tips

Palm tree icon

My retirement

Your retirement is the beginning of a new life—plan well and dare to dream!

See our tips

Suitcase icon

My business

Are you thinking of branching out on your own, launching a business or going back to school?

See our tips

Little details that matter

Legal disclaimers

TM All-In-One is a trademark of National Bank of Canada.

1. Subject to change without notice

2. Offer valid from January 17, 2011, to April 31, 2018. Limit of one cashback per All‑In‑One. The cashback will be credited to the client's All‑In‑One account at National Bank or will be granted in the form of a bank draft. If the loan is repaid in full, refinanced or renegotiated before expiry, a portion of the cashback prorated to the effective duration of the loan must be repaid. Employees of National Bank and its subsidiaries and entities are not eligible for this offer. National Bank reserves the right to end this offer at any time without notice. This offer cannot be combined with any other offer, promotion or advantage. All details and conditions are available in branches.

3. Subject to credit approval by National Bank.

4. Subject to not exceeding the maximum line of credit amount available, i.e., 65% of the value of the property.

5. Subject to credit approval by National Bank. Speak with your accountant, tax specialist or financial planner to see if this is the right strategy for you.

6. Certain restrictions apply. Please consult your loan contract.

7. The conventional charge mortgage is sometimes called a "residential mortgage" by some lenders. The “conventional charge mortgage” sometimes refers to a mortgage that is not insured by a mortgage insurer. The lender must purchase mortgage insurance when the financed amount is greater than 80% (or less, depending on the type of financing) of the mortgaged property’s value.

8. Up to the registered mortgage amount.

9. National Bank generally requires that the mortgage amount be 100% of the property value or the purchase price, whichever is less.

10. Administrative fees may also apply.

11. The request for additional funds could be denied if the borrower’s financial situation has changed, for example due to the loss of a job. The request may also be denied if the value of the property is insufficient to secure the additional funds.

12. The new lender may bear certain fees.

13. Subject to consent of the original lender in certain provinces.

Learn more about buying a home

Need advice?

Meet with an advisor in the place that’s most convenient for you, even at home!

Find an advisor

Telephone icon
Locator icon