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Frequently Asked Questions

What are stress tests & qualifying rates?

Stress tests allow lenders to ensure you can handle payments at a specific qualifying rate. While the qualifying rate will be higher than your actual mortgage, the process ensures that you will be able to endure a mortgage payment if it were to rise. Luckily, your actual charges will be based on a lower contract rate that Qubic will negotiate on your behalf!

What is CMHC Insurance or Mortgage Default Insurance?

Mortgage default insurance is a mandatory government-required insurance that protects lenders. Homeowners will need to purchase mortgage default insurance through Genworth (Sagen) or Canada Guaranty if their downpayment is between 5% and 20%. The premium for your mortgage default insurance is typically added to your mortgage amount.

What is the First-Time Buyer Incentive?

The First-Time Home Buyer Incentive is a federal government shared equity program designed to reduce mortgage payments for qualifying first-time buyers with the minimum 5% down payment required. This incentive provides 5% of the cost of an existing home or 10% of a new build. The First-Time Home Buyer Incentive isn’t payable to the recipient until the property is sold. Other important conditions to note: 

  • If your household income is $120,000 or more, you are not eligible for the program. 
  • The maximum you can borrow is four times your household income. This includes the incentive portion. 
  • The maximum down payment for the 10% incentive is 9.99% and 14.99% for 5% down.

You must pay the incentive back after 25 years OR when you sell your home. This repayment amount is based on fair market value, meaning it could increase or decrease.

How Do You Prepare for a Mortgage Renewal?

You have plenty of time to compare mortgages before your current loan comes up for renewal, so take this opportunity and don’t settle. You should also make sure you understand all the terms in detail as interest rates will change. Consider refinancing if necessary!

When Can I Start Shopping for My Mortgage Renewal?

You should start shopping for your mortgage renewal no later than 120 days before your maturity date.

What Are the Costs Associated with Refinancing My Mortgage?

If you want to refinance before your mortgage is up for renewal, your closing costs will include:

  • A mortgage prepayment penalty
  • A mortgage discharge fee 
  • A mortgage registration fee 
  • Legal fees

When Should I Strongly Consider a Refinance?

  • If your mortgage rate is locked in above the current market interest rates, you should strongly consider refinancing. 
  • If you want to switch to a fixed-rate mortgage from a variable rate. 
  • If your property has equity and you need money. 
  • If you are interested in lowering regular monthly payments.
  • If you need to pay off debts with high interest-rates
  • If you are renovating.

When Should I NOT Consider a Refinance?

  • If you’re paying off more principal than interest with a long-term mortgage. 
  • If your mortgage has a prepayment penalty that does not make financial sense to pay. 
  • If you are planning to move within the next few years.

What Type of Refinancing is Right for Me?

This is where Qubic comes in! Once we determine your current financial situation and your refinancing requirements, we can advise you on the best type of loan to achieve your goals.