Mortgage FAQ — Common Questions Answered | Rachel Rogerson

Question 1

What does a mortgage broker do?

Accepted Answer

A mortgage broker acts as an intermediary between you and lenders. Instead of going to one bank, I shop your application across dozens of lenders — banks, credit unions, monolines, and trust companies — to find the best rate and terms for your situation. My services are paid by the lender, so there is no cost to you in most cases.

Question 2

Why use a broker instead of going directly to my bank?

Accepted Answer

Your bank can only offer their own products. I have access to a wide network of lenders all competing for your business, which typically means better rates and more flexible terms. I also handle all the paperwork and negotiations on your behalf.

Question 3

How much does it cost to work with Rachel?

Accepted Answer

In most cases, nothing. Lenders pay brokers a finder's fee when a mortgage is funded. The only exception is in certain private or alternative lending situations, where a broker fee may apply — and I will always disclose this upfront before you commit to anything.

Question 4

Which provinces do you serve?

Accepted Answer

I am licensed to serve clients in British Columbia, Alberta, and Ontario.

Question 5

How much do I need for a down payment?

Accepted Answer

The minimum down payment in Canada is 5% for homes priced under $500,000. For homes between $500,000 and $999,999, it's 5% on the first $500,000 and 10% on the remainder. Homes over $1 million require at least 20% down.

Question 6

What is a mortgage pre-approval and why do I need one?

Accepted Answer

A pre-approval is a conditional commitment from a lender stating how much they will lend you and at what rate. It gives you a clear budget before you start house hunting, makes your offers more competitive, and locks in a rate for up to 120 days while you shop.

Question 7

What is the difference between a fixed and variable rate mortgage?

Accepted Answer

A fixed rate stays the same for your entire term, giving you predictable payments. A variable rate fluctuates with the lender's prime rate — it has historically been lower over time, but comes with more payment uncertainty. The right choice depends on your risk tolerance and financial situation.

Question 8

What is mortgage default insurance (CMHC)?

Accepted Answer

If your down payment is less than 20%, your mortgage must be insured against default. This insurance is provided by CMHC, Sagen, or Canada Guaranty and protects the lender — not you. The premium is added to your mortgage balance and ranges from 2.8% to 4% of the loan amount.

Question 9

Should I just sign my bank's renewal offer?

Accepted Answer

Almost certainly not without shopping around first. Lenders send renewal offers knowing most people will sign without negotiating. Send me your renewal notice and I'll tell you within 24 hours whether you can do better — at no cost or obligation.

Question 10

Can I switch lenders at renewal without a penalty?

Accepted Answer

Yes. At the end of your mortgage term, you are free to switch lenders with no prepayment penalty. This is the best time to shop for a better rate.

Question 11

What is refinancing and when does it make sense?

Accepted Answer

Refinancing means replacing your existing mortgage with a new one — typically to access a lower rate, tap into your home equity, or consolidate debt. It makes the most sense at renewal (no penalty) or when the savings from a lower rate outweigh the prepayment penalty of breaking your current term early.

Question 12

How much can I borrow when refinancing?

Accepted Answer

You can refinance up to 80% of your home's current appraised value, minus your existing mortgage balance. I'll help you calculate exactly how much equity you can access.

Question 13

What is a HELOC?

Accepted Answer

A Home Equity Line of Credit (HELOC) is a revolving credit facility secured against your home. You can borrow up to 65% of your home's value (or 80% combined with your mortgage), draw funds as needed, and only pay interest on what you use.

Question 14

What can I use a HELOC for?

Accepted Answer

HELOCs are commonly used for home renovations, debt consolidation, investments, education costs, or as an emergency fund. Because the rate is much lower than credit cards or personal loans, it's one of the most cost-effective ways to borrow.

Question 15

What credit score do I need for a HELOC?

Accepted Answer

Most lenders require a minimum credit score of 680. The stronger your credit profile, the better the rate you'll receive.

Question 16

Who qualifies for a reverse mortgage?

Accepted Answer

Canadian homeowners aged 55 and older who own their primary residence. The amount you can access — up to 55% of your home's appraised value — depends on your age, the property type, and its location.

Question 17

Do I have to make monthly payments on a reverse mortgage?

Accepted Answer

No. There are no monthly mortgage payments required. The loan plus accrued interest is repaid when you sell your home, move out permanently, or your estate settles.

Question 18

Will the bank own my home?

Accepted Answer

No. You retain full ownership of your home throughout the life of the reverse mortgage. It is simply a loan registered against your property, just like a traditional mortgage.

Question 19

Can I owe more than my home is worth?

Accepted Answer

No. Canadian reverse mortgage providers guarantee that you will never owe more than the fair market value of your home at the time of repayment.

Question 20

What is a private mortgage?

Accepted Answer

A private mortgage is funded by a private individual or company rather than a bank. Private lenders focus on your property's equity rather than your credit score or income, making them an option when traditional lenders say no.

Question 21

Are private mortgages more expensive?

Accepted Answer

Yes — private mortgages carry higher interest rates (typically 8–14%) and may include lender and broker fees. They are designed as short-term solutions while you improve your situation and transition back to conventional financing.

Question 22

How quickly can a private mortgage close?

Accepted Answer

Private mortgages can close in as little as a few days, compared to weeks for conventional mortgages — making them ideal when timing is critical.

Frequently Asked Questions

Working With a Mortgage Broker

Buying a Home

Renewals & Refinancing

Home Equity & HELOCs

Reverse Mortgages

Private Mortgages

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