Frequently Asked Questions: Mortgage

At Interior Savings, we know that every member has unique mortgage needs. That’s why we’re here to provide you with honest, sound advice so that you can make wise decisions.

Payments

What’s the “right” monthly mortgage amount? Expand/Collapse

Generally, your monthly mortgage payment should not exceed 32% of your gross monthly income, before deductions. Deductions can include property taxes, heating costs, 50% of condo fees, lot rental if the property is on leased land, and other expenses.
Your monthly mortgage payment is based on a few factors, including:

  • The amount borrowed
  • The interest rate
  • The length of the mortgage ("amortization period")
  • Taxes

What is a down payment? Expand/Collapse

  • A down payment is the amount that you pay towards your next home in order to receive a mortgage.
  • The minimum down payment is 5% of the appraised value or purchase price (whichever is less).
  • If you put between 5-20% as a down payment, your mortgage is considered a "high ratio mortgage."
  • Making your down payment, learn more

What is a payment schedule? Expand/Collapse

A payment schedule is the frequency that your mortgage payments are made. You can choose to make monthly, bi-weekly or weekly payments.

More frequent payments can lead to significant savings over the life of your mortgage. To learn more, please take a look at our  mortgage calculator.

 

What is a high ratio mortgage? Expand/Collapse

  • A high ratio mortgage is when the amount borrowed is 80% or more of the appraised value or purchase price of the property (whichever is less).
  • High ratio mortgages must be insured by the CMCH or a private company. This insurance protects Interior Savings in the event that you are unable to make your mortgage payments ("member default").

Types of Mortgages

What is a variable rate mortgage? Expand/Collapse

  • Interest rate may change periodically
  • Monthly payment will remain the same but the amount that goes towards principal and interest may fluctuate accordingly
  • Good option if you think that interest rates will remain the same or decrease during your mortgage term.

What is a fixed rate mortgage? Expand/Collapse

  • The interest rate remains constant
  • Good option if you think that interest rates will rise during your mortgage term, or if you simply want the peace of mind of knowing exactly how much of your monthly payment will be going towards principal, and how much towards interest.

What is an open mortgage? Expand/Collapse

  • Allows you to make payments towards your principal at anytime without penalty
  • Good option if you want the freedom and flexibility to make additional and unscheduled mortgage payments, and as such pay off your mortgage sooner

What is a closed mortgage? Expand/Collapse

  • Doesn’t allow you to make additional or unscheduled payments, except for those permitted by your mortgage agreement.

General Questions

What is a mortgage? Expand/Collapse

A mortgage is a loan that is specifically used to buy property, such as a house. The property is then used as security until the mortgage is paid.

You pay the interest owing on your mortgage through your regular payments. The longer your mortgage period (also called your “amortization period”), the more interest you’ll pay. It’s possible to refinance your mortgage during its term, to either take advantage of better rates, or choose another option that better fits your needs, budget and lifestyle. Different mortgages have different rules, so be sure you clearly understand them before you make any changes

I’m buying my first home. Do you have any advice? Expand/Collapse

Yes, we have created a special page with tips and advice for buying a home. Click here to learn more.

My mortgage is nearing renewal. What should I do? Expand/Collapse

You have many options, including pre-renewal. Click here to learn more.

How can I better manage my mortgage? Expand/Collapse

Taking control of your mortgage so that you can get even more benefits and advantages is easier than you think! We’ve listed some powerful strategies and tips to help. Click here to learn more.

Do I need mortgage insurance? Expand/Collapse

If you don’t have a high ratio mortgage, then mortgage insurance is optional. However, considering how financially destabilizing it can be to you and your family if a crisis or tragedy unfolds, having mortgage insurance makes a great deal of sense – and delivers immense "peace of mind." Click here to learn more.