Mortgage Squad is committed to caring for the health and well.

Fast Approval!

First Mortgage

The first mortgage is the primary, or first, lien against your property and has priority over all other liens. The agreement that you make with a lender, such as a bank, to borrow money to purchase a property is a mortgage. In the event of a default your first mortgage is paid back before your second mortgage or any other liens. The term ‘first mortgage’ is for the first loan taken out against your property and does not denote the first time you buy a home.

There are a range of options available to you when it comes to your first mortgage, and these can include deciding the type of interest rate, the type of loan, the term and amortization period of the mortgage loan, and your repayment structure. For all your first mortgage needs, trust the experienced team at Mortgage Squad Agents to find a solution that is right for you.

    You Are Approved! Apply Today

    Whether you are looking for mortgage guidance or ready for quote, we will help you get the right insurance for you.

    What is a First Mortgage?

    When you are purchasing your home and shopping around for a first mortgage you can talk to individual lenders or to a broker. Speaking to a single lender, like a bank or credit union, only gives you access to their own rates and services. Speaking with a broker gives you access to the first mortgage rates and services of many different lenders all at once. Rather than speaking with different lenders one by one and comparing, it can be quicker and more effective to speak with a broker who can provide you with the best rate for your first mortgage.

    Should You Use a Broker for Your First Mortgage?

    When you are purchasing your home and shopping around for a first mortgage you can talk to individual lenders or to a broker. Speaking to a single lender, like a bank or credit union, only gives you access to their own rates and services. Speaking with a broker gives you access to the first mortgage rates and services of many different lenders all at once. Rather than speaking with different lenders one by one and comparing, it can be quicker and more effective to speak with a broker who can provide you with the best rate for your first mortgage.

    The Loan-to-Value Ratio of Your First Mortgage

    When you borrow money from a lender for your mortgage, you are taking a loan. The money that you borrow is known as your loan amount, and when you compare that to the value of your property you get the loan-to-value ratio. If your loan-to-value ratio of your first mortgage is greater than 80%, meaning your down payment was less than 20% of the property’s value, you are required to get mortgage default insurance. Since your loan-to-value ratio of your first mortgage is shaped by your down payment, you have an incentive to have a larger one. The greater your down payment the lower the mortgage default insurance will be. If your down payment is greater than 20% of the property value then you are not required to have default insurance.

    Tips for Getting a First Mortgage

    Because the burden to prove eligibility is greater on self-employed individuals, it pays to be well prepared before applying for a loan. The following should be considered before going into apply for a Self-Employed Mortgage:

    Mortgage Insurance for First Mortgage

    Mortgage insurance is a financial protection for your first mortgage that provides coverage to pay the mortgage in the event of difficulties. An insurance policy may be required by your lender or the government for your first mortgage, like mortgage default insurance (sometimes referred to as CMHC insurance) that is mandatory if your down payment is less than 20%.

    There are different mortgage insurance policies for different situations. The major categories of mortgage insurance you may need for your first mortgage are:

    • Mortgage Default Insurance: This pays out directly to the lender in the case of a default and is required for your first mortgage if your down payment is less than 20%.
    • Mortgage Life Insurance: This pays out directly to the designated beneficiary in the event of death of the policy holder. Some serious medical issues may also be covered by critical illness coverage in some policies.
    • Mortgage Title Insurance: Provides indemnity or protection for both lenders and homebuyers from financial losses in the event of issues with the title when the property is sold.

    First Mortgage and Taxes

    One of the ways that having a mortgage is made a little easier is through tax benefits. The mortgage interest paid on your first mortgage is tax deductible, allowing you to subtract the interest paid from your taxable income. If you are a first time home buyer there are many additional incentives and programs you can take advantage of to make your first mortgage a little easier. Getting a first mortgage can be a stressful time, let Mortgage Squad Agents find a solution that is right for you.

    Facts for First Mortgage

    Your first mortgage can be open or closed
    With an open mortgage you can make extra payments whenever you want. With a closed mortgage this is usually restricted to certain agreed upon windows.
    Closed mortgages typically have lower mortgage rates compared to open ones.
    The amortization period is the time it will take to completely pay off your first mortgage.
    The mortgage term is the length of time your current agreement and interest rate is in effect. Typically a term is five or more years, at the end of which you renew your mortgage term.
    Interest rates for your first mortgage can be fixed or variable. Hybrid rates for first mortgages exist but aren’t generally recommended.
    If it is your first time buying a home, there are a range of programs that First Time Home Buyers can benefit from for their first mortgage:

    • First Time Home Buyer Incentive
    • RRSP Home Buyer’s Plan
    • Land Transfer Tax Rebate for First Time Home Buyers
    • First-Time Home Buyers’ Tax Credit
    • GST/HST New Housing Rebate

    Let the team at Mortgage Squad Agents help you find the best deal for your first mortgage.

    Is it harder to get a mortgage if I am self employed?

    Obtaining a Self-Employed Mortgage can be more difficult than a traditional mortgage as the borrower has to take extra steps to prove to the lender that they are capable of maintaining regular payments on their mortgage. It is possible that depending on the financial institution, that Self-Employed Mortgages are not offered at all. Where they are offered, there is also the chance that banks will significantly increase the interest rates for these loans, making them a more difficult consideration for borrowers. To give a better chance at being approved, lenders are expected to offer a large down payment, up to 20% or higher, as well.

    Another difficulty associated with Self-Employed Mortgages is the lack of a T4. A full time Employee can provide proof of income through a simple T4, however a self-employed individual must provide a stated income form, which shows the amount the potential borrower claimed to have earned, and then must provide documentation which can prove the stated amount is accurate.

    Lenders will also apply the Debt Service Ratio when considering your eligibility for a loan. This is a measurement which determines your ability to maintain regular payments on a loan after all your financial responsibilities have been considered. These include monthly bills, car loans, lines of credit, student debt and any other loans.

    If after considering these other factors the bank is confident that you are able to meet their requirements for regular payments, you will be eligible for a loan.

    Commonly Asked Questions

    The first mortgage is the primary, or first, lien against your property and has priority over all other liens. It is the mortgage agreement that you first borrow from a lender to purchase your home. In the event of a default your first mortgage is paid back before your second mortgage or any other liens.
    Your first mortgage is the agreement made with your lender when you purchase your property. A second mortgage is a type of loan that allows you to access the equity in your property. Compared to the first mortgage the second mortgage is considered riskier for the lender and may have stricter requirements and a higher mortgage rate.

    Ready to Apply ?

    Download an application form or apply online today.

    Customer Support

    Got the question? our support team is available to talk with you.

    Talk With Us

    Apply Online

    To apply online, simply complete our application form and we will back to you as soon as possible.

    Apply Online

    Download Form

    Simple download and complete the application form ans submit to our near branch office.

    Download PDF

    Live questions

    We are online. Click on Live chat button to talk with the human right now.

    Start Chat

    Win A Free Mortgage Payment

    Register your mortgage renewal date with Mortgagesquad.ca and you could WIN your first month’s mortgage payment upon renewal (see terms and conditions). When you register your renewal date with us, you are securing the lowest interest rate possible up to four months prior to your mortgage coming due. So, if rates go up prior to your mortgage renewing, you can still get the lower rate. If rates go down, you will still get the lower rate… it is a WIN WIN FOR YOU.

    Ready to get started?

    Speak to Mortgage Squad at (905) 553-8550