- Start with Mortgage Pre-Approval: Getting pre-approved is the first critical step. It determines your budget and shows sellers you’re serious and qualified. A pre-approval will assess your income, credit score, and down payment to estimate your maximum loan amount and lock in an interest rate for up to 90-120 days. This gives you a clear price range when house hunting in Coquitlam.
- Save for a Sufficient Down Payment: In Canada, you need at least 5% down for homes up to $500,000, and 10% for any portion between $500,000 and $1.5million. (Homes over $1.5million require 20% down.) Coquitlam’s higher home prices mean many buyers will be in the 5%-10% down category. The more you can put down, the better – a larger down payment can help you avoid or minimize mortgage insurance costs and improve your affordability.
- Understand Mortgage Options: Decide between fixed vs. variable interest rates, and consider different lenders. Fixed-rate mortgages have a constant rate for the term, providing stability, while variable rates can fluctuate with the market. Each has pros and cons depending on your risk tolerance and the interest rate outlook. Also, compare offerings from big banks, credit unions, and monoline lenders – a mortgage professional (like myself) can shop around to find you the best rate and terms for your situation.
- Take Advantage of First-Time Buyer Programs: If you’re a first-time home buyer in B.C., there are valuable programs to reduce your costs. The Home Buyers’ Plan (HBP) lets you borrow up to $60,000 from your RRSP for a down payment (tax-free, if repaid over time). The new Tax-Free First Home Savings Account (FHSA) allows you to save for your down payment with tax-deductible contributions and tax-free withdrawals. There’s also the First-Time Home Buyer Incentive, a federal program where the government provides 5–10% of the home’s price as a shared-equity loan to lower your monthly payments. In B.C., provincial incentives include a Property Transfer Tax break – first-time buyers get up to $8,000 off the land transfer tax, which means no tax on the first $500,000 of a home priced under $835,000 (with a sliding partial credit up to $860,000). Make sure you explore these programs if you qualify, as they can significantly improve affordability.
- Work with a Knowledgeable Mortgage Professional: Rules and rates are always changing. An experienced Coquitlam mortgage broker can guide you through the process, help you understand updated regulations (like the mortgage stress test), and tailor a mortgage strategy to your needs. The stress test means you must qualify at a higher rate (the greater of 5.25% or your contract rate + 2%) to ensure you can handle future rate increases – we’ll help you navigate this and other requirements. Partnering with a mortgage expert ensures you’re making informed decisions at every step.
Mortgages are not one-size-fits-all. One advantage of working with a mortgage professional is that I can help you understand the different mortgage products and find the best fit for your needs. Here are some key decisions and options when structuring your mortgage:
- Fixed vs. Variable Rate: This is one of the biggest choices. A fixed-rate mortgage carries an interest rate that stays the same for the entire term (most commonly a 5-year term). This means your monthly payment is predictable and won’t change, which can be comforting in a rising rate environment. A variable-rate mortgage has a rate that can fluctuate with the market – it’s tied to your lender’s prime rate, which moves based on the Bank of Canada rate. Variable rates often start lower than fixed rates, and historically they’ve averaged out to be slightly cheaper, but they come with more uncertainty since your payment or interest portion can change if rates go up or down. In Coquitlam’s current market, many buyers are leaning towards fixed rates for stability, but if you believe rates may fall or you have flexibility in your budget, a variable could save money. We can also discuss hybrid options (part fixed, part variable) if that suits you. Expert tip: If you go variable, ensure you’re comfortable with the possibility of rate increases – qualifying under the stress test helps, since you’ve shown you can handle at least 2% more.
- Term Length: The term is how long your rate and mortgage agreement conditions are in effect before you need to renew or refinance. In Canada, 5-year terms are the most common, but terms can range from 1 year to 10 years. Shorter terms might offer lower rates, but you’ll be renewing sooner (potentially at a higher rate if the market rises). Longer terms give more certainty. Many first-time buyers stick with 5 years as a balance of a good rate and some stability. If you anticipate moving or paying off the mortgage in the near future, a shorter term or an open mortgage (which you can exit anytime) might make sense. We’ll discuss your plans to choose the right term length.
- Amortization Period: This is the total length of time you’ll take to pay off the mortgage in full (if you followed the regular payment schedule and never refinanced). The standard amortization is 25 years for most mortgages, but insured mortgages (high-ratio with <20% down) can now go up to 30 years for first-time buyers on homes under $1.5M (a recent change allowing a bit longer amortization to help with affordability). A longer amortization reduces your monthly payment, but you pay more interest overall. If you can handle the payments, a shorter amortization (say 20 or 25 years) will save a lot in interest and get you debt-free faster. Often, we start with 25-30 years for flexibility, and I encourage making use of prepayment privileges later to effectively shorten the timeline by paying extra when you can.
- Conventional vs. Insured Mortgage: We touched on this, but to clarify: if you put 20% or more down, you’ll have a conventional (uninsured) mortgage – no CMHC insurance needed. If you put less than 20%, your mortgage must be insured (by CMHC or a private insurer like Sagen/Canada Guaranty). Insured mortgages have slightly lower interest rates typically, but come with that insurance premium added to the balance. Lenders actually often give their best rates on insured mortgages (because there’s less risk to them). So don’t feel that a high-ratio mortgage is “bad” – it’s a very common and viable path, especially for first-time buyers to get into the market sooner. We’ll weigh these options based on your down payment.
In short, the “right” mortgage isn’t just about the lowest rate – it’s about the product that aligns with your financial goals and life plans. I will use my expertise to present you with options from various lenders and explain the pros and cons of each, so you can make an informed decision. Whether it’s fixed or variable, 2-year term or 5-year, we’ll tailor the mortgage to fit you. That’s a big part of the personalized service I provide.
Let’s connect and get you started on securing the best mortgage for your Coquitlam home purchase. Feel free to reach out anytime – my services come at no cost to you, and I’m always happy to chat about your goals and concerns. Together, we’ll make a plan to get you home.
Ready to take the next step? Book an appointment today for a free consultation, and let’s find the perfect mortgage to finance your Coquitlam home!
.avif)
Secure the right mortgage with solutions that showcase your income and support your self-employed goals.
Learn More
Build long-term wealth with a mortgage strategy that maximizes returns and supports your real estate goals.
Learn More
Tailored mortgage solutions that help self-employed Canadians secure approval and highlight their true income.
Learn More
