Category: Buying

Quick answer: A fixed mortgage generally keeps the interest rate unchanged for the term, while a variable rate may rise or fall. The better choice depends on budget flexibility, risk tolerance, expected plans and the mortgage contract—not simply today’s advertised rate.

Last verified: September 15, 2026

Fixed-rate mortgage

A fixed rate can make budgeting more predictable because the rate does not change during the term. The tradeoff may include a higher starting rate or a different prepayment-penalty calculation if the mortgage is broken early.

Variable-rate mortgage

A variable rate changes with the lender’s reference rate. Some products have payments that change; others may keep the scheduled payment stable while the amount applied to interest and principal changes. Buyers should ask exactly how their proposed product operates.

Seven questions to ask

1. Can the payment increase, or does the amortization change?
2. What happens at a trigger rate or trigger point?
3. How is the penalty calculated if the mortgage is broken?
4. Can the variable mortgage be converted to fixed, and on what terms?
5. What prepayment privileges are included?
6. Is the mortgage portable?
7. Could the household budget manage a meaningful payment increase?

The Financial Consumer Agency of Canada explains that variable-rate products can behave differently and may expose borrowers to rising payments or negative-amortization risk.

Rate is not the only cost

Compare the term, amortization, payment frequency, privileges, restrictions, fees and penalties. A slightly lower rate may not be the least expensive option if the borrower expects to move, refinance or make large prepayments.

Before choosing

• Complete a current mortgage pre-approval.
• Stress-test the household budget.
• Ask for written illustrations of different rate scenarios.
• Review the commitment and disclosure documents carefully.
• Obtain advice from a licensed mortgage professional suited to your circumstances.

Official sources

• FCAC: Mortgage terms and amortization
• FCAC: Interest on mortgages

Frequently asked questions

Can a variable mortgage payment stay the same?

Some variable products have fixed scheduled payments while the allocation between interest and principal changes. Others change the payment when rates change. The commitment should explain the specific mechanism.

Can I switch from variable to fixed?

Some lenders allow conversion, but the available fixed rate, remaining term and conditions may not be the same as choosing fixed at the outset. Ask for the conversion policy in writing.

Which option is safer?

Fixed rates generally provide greater rate certainty during the term, while variable rates create more exposure to market changes. Suitability depends on cash-flow capacity, plans and comfort with uncertainty.

What if I expect to sell soon?

Prepayment penalties, portability and term length may become especially important. Compare the cost of leaving the mortgage—not only the starting rate.

General information only: This is not mortgage or financial advice. Product terms and suitability vary.

Quick answer: Ontario first-time buyers may be able to use several different programs, but eligibility definitions and deadlines are not identical. The main established programs include the Ontario land-transfer-tax refund, the federal First Home Savings Account and the Home Buyers’ Plan.

Last verified: September 15, 2026

Ontario land-transfer-tax refund

Eligible first-time homebuyers may receive a refund of Ontario land transfer tax, up to the current provincial maximum. Eligibility includes rules about prior home ownership, occupancy, age and immigration status. Buyers purchasing in Toronto should separately investigate the municipal land-transfer-tax rebate.

See the Ontario government’s eligibility page and OHI’s Ontario land-transfer-tax guide.

First Home Savings Account

An FHSA combines features of registered retirement and tax-free savings accounts. Eligible individuals can generally contribute up to the annual limit, subject to a lifetime limit, and may make a qualifying withdrawal for a first home. Account-opening dates, participation periods, contribution room and withdrawal requirements matter, so buyers should confirm the current CRA rules.

Review the current FHSA rules on Canada.ca.

Home Buyers’ Plan

The HBP may allow an eligible participant to withdraw up to the current limit from RRSPs to buy or build a qualifying home. As of the verification date, the stated limit is $60,000. Repayment rules apply, and recent RRSP contributions can create deduction issues.

Review the current Home Buyers’ Plan rules.

Can the FHSA and HBP be used together?

Eligible buyers may be able to use both for the same qualifying purchase. That does not mean every buyer should automatically do so. Tax consequences, repayment obligations, timing and long-term savings goals should be discussed with a qualified tax or financial professional.

New-home HST rebates

New and substantially renovated homes can involve separate federal and Ontario rebate programs. Ontario and federal governments have also announced or implemented changes affecting qualifying transactions. Because eligibility can depend on the agreement date, construction dates, occupancy and enacted regulations, buyers should verify the current CRA and Ontario rules for the exact transaction rather than relying on a general summary.

OHI’s new-construction guide explains other upcoming buyer changes.

Costs these programs may not cover

• Legal fees and disbursements
• Home inspection and appraisal costs
• Title insurance
• Adjustments for taxes, utilities or condo fees
• Moving, repairs and immediate maintenance

Review OHI’s guides to closing day and Ontario property taxes.

Official sources

• Ontario land-transfer-tax refund
• CRA: First Home Savings Account
• CRA: Home Buyers’ Plan

Frequently asked questions

Who counts as a first-time buyer?

Definitions differ among the FHSA, HBP and land-transfer-tax refund. A person may qualify for one program but not another. Marital status, prior ownership and occupancy history can all matter.

Can two eligible buyers each use benefits?

Some programs apply individually, while transaction-level caps or ownership shares may affect the result. Buyers should obtain tax and legal advice based on how title will be held.

When should eligibility be confirmed?

Before relying on a benefit in the purchase budget. Account opening, contribution, agreement and occupancy dates can affect eligibility, and announced programs may require final legislation or regulations.

General information only: Program rules change and individual eligibility is fact-specific. This is not tax, financial, mortgage or legal advice.

Quick answer: A home-inspection condition can give a buyer time to arrange an inspection and decide how to proceed under the wording of the agreement. The clause does not make every repair the seller’s responsibility, and an inspection is not a warranty that every defect will be found.

Last verified: September 15, 2026

What should the condition specify?

The agreement should clearly address the inspection deadline and how notice must be delivered. The buyer should understand whether the clause refers to obtaining an inspection, being satisfied with the results, or another standard. The exact wording matters.

What happens during the inspection period?

1. Book an appropriately qualified inspector as soon as possible.
2. Provide access details through the real estate representatives.
3. Attend the inspection where practical and ask questions.
4. Read the full report rather than relying only on the verbal summary.
5. Obtain specialist opinions where a concern falls outside a general inspector’s expertise.
6. Review contractual options before the condition deadline.

What might require a specialist?

• Electrical, structural, roofing or foundation concerns
• Wood-burning appliances
• Mould, asbestos or other environmental concerns
• Wells and septic systems
• Drainage, shoreline, erosion or rural-access issues
• Unpermitted additions or renovations

For rural properties, use OHI’s rural-property due-diligence guide and septic-system guide.

Can the buyer renegotiate after the inspection?

A buyer may ask the seller to repair an issue, provide a credit, adjust the price or amend another term. The seller does not automatically have to agree. The buyer’s actual options depend on the agreement and the condition wording. Any amendment should be documented properly.

What if the property is being sold “as is”?

“As is” does not eliminate the need for due diligence. It may signal that the seller does not intend to make repairs or provide certain warranties. Buyers should obtain legal advice about the clause and investigate the property carefully.

Inspection limits buyers should understand

A general inspection is primarily visual and non-invasive. Concealed defects, intermittent problems and inaccessible areas may not be discovered. Buyers should also review seller-provided documents without treating them as substitutes for independent investigation.

Related OHI guides

• Renovations Without Permits in Ontario
• Property Surveys in Ontario
• Easements on Property in Ontario
• Buying a House With a Basement Apartment

Frequently asked questions

How long does a home inspection take?

It depends on the property’s size, age, systems and condition. Buyers should ask the inspector about the expected duration, scope, limitations and when the written report will be delivered.

Does an inspection determine building-code compliance?

A general home inspection is not normally a full code-compliance or permit investigation. Municipal records, specialist opinions and legal review may be needed for additions, converted spaces or suspected unpermitted work.

Can an inspection find every hidden defect?

No. Inspections are usually visual and non-invasive. Finished walls, stored belongings, weather conditions and inaccessible areas can limit what is observed.

General information only: Inspection conditions and contractual rights depend on the agreement and facts. This is not legal, engineering, environmental or inspection advice.

Quick answer: A financing condition gives a buyer a defined period to try to arrange satisfactory financing before the agreement becomes firm. Its exact protection depends on the wording, deadlines and facts. A mortgage pre-approval is helpful, but it is not the same as final approval for the buyer and the chosen property.

Last verified: September 15, 2026

What is a financing condition?

In a conditional agreement of purchase and sale, the buyer’s obligation to complete may depend on satisfying or waiving specified conditions within the stated time. The clause should identify the deadline and the method for giving notice. Buyers should not assume every “financing clause” works identically.

Why financing can fail after pre-approval

• The lender’s appraisal is below the purchase price.
• The property type or condition does not meet underwriting requirements.
• Insurance cannot be obtained on acceptable terms.
• The buyer’s income, credit, debts or employment circumstances change.
• The down payment cannot be adequately documented.
• The lender requests information that cannot be supplied before the condition deadline.

Start with OHI’s guide to mortgage pre-approval in Ontario and the guide to a low appraisal.

What should happen during the conditional period?

1. Send the accepted agreement and property information to the lender or mortgage broker immediately.
2. Respond promptly to document requests.
3. Confirm whether an appraisal is needed and when it can be completed.
4. Discuss insurability, especially for older, rural or unusual properties.
5. Ask what remains outstanding before treating the financing as complete.
6. Review the waiver or fulfilment decision with the appropriate professionals before the deadline.

What does waiving the condition mean?

Waiving or fulfilling a condition can make the agreement firm, subject to its full terms. If the buyer later cannot obtain financing, the buyer may still face serious contractual and financial consequences. This is why a waiver should not be treated as routine paperwork.

Can a buyer simply walk away?

Not automatically. The answer depends on the wording, the buyer’s conduct and the circumstances. Conditions often require good-faith efforts and timely notice. Buyers should obtain legal advice before relying on a condition to end an agreement.

Related due diligence

Financing is only one part of the offer. A buyer may also need to consider a home-inspection condition, title issues, insurance, a survey, septic or well due diligence, or condo-document review.

Useful OHI guides

• Closing Day in Ontario
• Title Insurance in Ontario
• Property Surveys in Ontario

Frequently asked questions

How long is a financing condition?

There is no universal period. The deadline is negotiated and should allow enough time for the lender to review the borrower, property, appraisal and supporting documents. Weekends and appraisal availability can affect what is realistic.

Is a lender’s verbal approval enough?

A buyer should ask what has actually been reviewed, what remains outstanding and whether the property has been accepted. Written confirmation can still contain conditions, so it should be read carefully.

Can the seller continue marketing the property?

That depends on the agreement and any escape or continued-marketing clause. Buyers should have their representative and lawyer explain the exact wording rather than assuming the property is entirely off the market.

General information only: Contract wording and legal consequences are fact-specific. This article is not legal, mortgage or financial advice. Buyers should consult their real estate representative, lender or mortgage broker and lawyer.

Quick answer: A mortgage pre-approval is an early assessment of how much a lender may be willing to lend based on your income, debts, assets, credit and other information. It can help define a realistic price range, but it is not a final mortgage approval and it does not guarantee that a particular property will qualify.

Last verified: September 15, 2026

What does a mortgage pre-approval tell you?

A pre-approval may provide an estimated maximum mortgage amount, an estimated payment and, in some cases, a rate hold for a stated period. It is useful for planning, but the maximum amount should not automatically become your target purchase price. Closing costs, moving expenses, repairs, property taxes, utilities and future maintenance still need room in the budget.

The Financial Consumer Agency of Canada explains that a pre-approval amount is the maximum you may receive—not a guarantee of financing.

Documents commonly requested

• Government-issued identification
• Recent pay statements and an employment letter
• Notices of assessment and additional records for self-employed applicants
• Bank or investment statements showing the down payment
• Information about credit cards, loans, lines of credit and support obligations
• Details about other assets and financial commitments

The lender or mortgage broker may ask for additional documents depending on employment type, credit history, the source of the down payment and the property being purchased.

Why can the final approval be different?

Final approval normally considers both the borrower and the property. A lender may review the agreement of purchase and sale, appraisal, property type, condition, location and insurance availability. New debts, missed payments, employment changes or moving the down payment between accounts can also create questions.

An appraisal that is lower than the purchase price can produce a financing gap. See OHI’s guide to what happens when an appraisal comes in low.

Pre-approval does not replace a financing condition

A pre-approved buyer can still face a declined or reduced mortgage after making an offer. Whether a financing condition should be included is a transaction-specific decision to discuss with the buyer’s real estate representative, lender or mortgage broker and lawyer. Read OHI’s guide to financing conditions in Ontario offers.

Questions to ask the lender or broker

• How long is the rate hold, and what happens if rates fall?
• Which documents must be updated before closing?
• Are the quoted payments based on a fixed or variable rate?
• What closing costs were assumed?
• What property types or conditions could create problems?
• Are there prepayment limits or penalties?

Before making an offer

1. Confirm the pre-approval is current.
2. Keep the down payment and closing-cost paper trail organized.
3. Avoid opening new credit or financing large purchases without asking the lender.
4. Estimate land transfer tax and other closing costs using OHI’s Ontario land-transfer-tax guide.
5. Review what happens on closing day in Ontario.

Official source

• Financial Consumer Agency of Canada: Getting preapproved for a mortgage

Frequently asked questions

Does a pre-approval affect my credit score?

A lender or broker may request a credit inquiry. Ask whether the inquiry will be a hard or soft check and whether several lenders will review the application. Credit-report treatment can depend on how and when inquiries are made.

How long does a mortgage pre-approval last?

Rate holds and document-validity periods vary. Income statements, employment information and bank records may need to be refreshed before an offer or closing, even when the original rate hold remains active.

Should I shop at the maximum amount?

Not necessarily. The maximum is an underwriting estimate, not a household spending recommendation. Buyers should leave room for closing costs, repairs, maintenance, rate changes and other goals.

General information only: Mortgage qualification and underwriting vary by lender and borrower. This article is not mortgage, financial, legal or tax advice.

Use this checklist to organize—not replace—professional advice. Every Ontario property and agreement is different. A buyer may need guidance from a real estate representative, lawyer, lender or mortgage broker, home inspector, insurer, municipality and qualified specialists.

Last verified: September 15, 2026

1. Budget and financing

• ☐ Obtain a current mortgage pre-approval.
• ☐ Confirm the down payment source and paper trail.
• ☐ Budget for land transfer tax, legal fees, adjustments and moving costs.
• ☐ Understand whether mortgage default insurance may apply.
• ☐ Compare fixed and variable mortgage risks.
• ☐ Review available first-time-buyer programs.

2. Offer planning

• ☐ Review comparable sales and decide on a maximum price.
• ☐ Understand the deposit amount and delivery deadline.
• ☐ Consider an appropriate financing condition.
• ☐ Consider a home-inspection condition.
• ☐ Review closing date, included items, rental equipment and vacant-possession terms.
• ☐ If competing, use OHI’s multiple-offer buyer strategy.

3. Physical property

• ☐ Inspect the structure, roof, electrical, plumbing, heating and drainage.
• ☐ Ask about permits and investigate renovations completed without permits.
• ☐ Investigate any basement apartment or additional unit.
• ☐ Obtain specialist review for concerns outside a general inspection.

4. Title, boundaries and legal matters

• ☐ Ask whether a current survey is available and review OHI’s survey guide.
• ☐ Investigate registered and visible easements.
• ☐ Discuss title searches and title insurance with the lawyer.
• ☐ Confirm access, encroachments, shared driveways and restrictive covenants where relevant.

5. Condominiums

• ☐ Review the status certificate with a lawyer.
• ☐ Understand condo fees and included utilities.
• ☐ Investigate reserve-fund concerns, litigation and special assessments.
• ☐ Check rules affecting pets, parking, renovations and leasing.

6. Rural properties

• ☐ Test and inspect the well and water system.
• ☐ Review the septic system.
• ☐ Confirm road access, maintenance, zoning, drainage, internet and heating.
• ☐ Use OHI’s rural-property guide.

7. Special transactions

• ☐ For an estate, review authority, probate and timing.
• ☐ For tenanted property, investigate the tenancy and vacant-possession risks.
• ☐ For new construction, review builder documents, adjustments, warranties and cooling-off rules.

8. After acceptance

• ☐ Calendar every condition, deposit and closing deadline.
• ☐ Send the agreement to the lender and lawyer immediately.
• ☐ Arrange insurance before waiving related conditions.
• ☐ Complete the final visit and closing-funds arrangements.
• ☐ Review what happens on closing day.

General information only: This checklist is not legal, mortgage, tax, engineering, inspection or financial advice.