Buy Next Property

Mortgages

Buy Next Property

Moving up or moving on

Selling your home to buy another one is not something that most people do often enough to become experts at the ins and outs of moving up or moving on. That’s why your HSBC mortgage specialist is here to help.

 

Some homeowners move up to a more expensive property while others are in the process of downsizing life and expenses. Either way, an HSBC mortgage specialist can recommend the most effective financial strategy based on a number of critical factors, including:

  • The type of mortgage you have (open or closed)
  • Your current interest rate
  • The time remaining on your current mortgage term
  • The amount of additional cash you may need to buy your next home

An HSBC mortgage specialist can contact your current financial institution and make all the arrangements for you. Select from any of these convenient options.

Your options Advantages
Pay off your current mortgage and negotiate a new one If interest rates have dropped since you last negotiated your mortgage, it may be advantageous to pay off your outstanding balance with the proceeds from your sale and create a new HSBC mortgage with more cost-effective features and rate options.
Pay off your current mortgage and combine a new one with a Home Equity Line of Credit Combining a mortgage with a home equity line of credit results in a combination of predictable payments and financial flexibility. This can be a good option if you have plans to renovate or upgrade your new home.
Pay off your current mortgage and switch to a Home Equity Line of Credit Use your home equity to help you achieve important goals, such as home renovation, education or debt consolidation. An HSBC Equity Power Mortgage lets you access up to 80% of the value of your home. Under an HSBC Equity Power Mortgage, you can access credit in flexible and affordable ways such as through a Home Equity Line of Credit.

There are many ways to finance an investment property in Canada. An HSBC mortgage specialist can help you establish your best approach based on how long you plan to own the property, your cash flow needs and the amount of capital your are prepared to invest up-front.

Short-term strategies, such as “house-flipping”, differ from longer-term investments. So, it’s important to develop a financial plan that includes the most effective financing option.

Assuming that you are investing for the long-term, you have options.

A conventional mortgage A Home Equity Line of Credit
Assigning a conventional mortgage to your investment property is common. Based on your down payment, the income from the property should cover the Principal and Interest payments and provide a contingency fund. If you have sufficient equity in your primary residence, a Home Equity Line of Credit can be a flexible and effective way to combine all of your debt into one package. If you anticipate the ability to make additional and lump-sum payments, this can be a very profitable approach.
The amount of your down payment is a critical factor in establishing a long-term and reliable return on your investment. Work with your Realtor and your HSBC mortgage specialist to determine the most cost-effective down payment amount based on the value of the property and its income potential. More might not always be better.

Vacation properties can easily turn into family legacies and provide years of enjoyment for generations to come. There are many factors to consider when you choose a long-term financing solution. For example:

  • Do you plan to pass this property to family members as part of your estate?
  • Will you receive any income from the property by renting it from time to time?
  • How quickly would you like to pay it off?

An HSBC mortgage specialist knows how to help you determine the best long-term solution for you and your family.


At this rate, you’ll be home in no time. See all rates.

 

The key to unlocking your future home. An HSBC Mortgage could be just what you need. Learn more.

What you need to know before applying

  • You are at least the age of majority, 18 or 19 years of age depending on your province of residence
  • You are a Canadian resident
  • You will be asked to provide personal details and gross annual income (pre-tax)
  • You will be asked to consent to us obtaining your credit report
  • If you are applying for a joint loan, the co-applicant must complete the application. If there is more than one co-applicant, please call us to proceed at 1-866-609-4722
  • All mortgages are subject to standard credit approval.

 

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What is a down payment and how much do I need to buy a home?

A mortgage down payment is the amount of money you have saved to purchase your home. You can have as little as 5% of the purchase price amount for a down payment to qualify for a mortgage.

Calculate your mortgage payments

If you are a first-time homebuyer, you may be able to use your RRSP for a down payment.

Learn more

What is amortization and a mortgage term?

Amortization is the estimated number of years it will take to pay off your mortgage. Amortization periods range up to 30 years. The longer your amortization is, the lower your mortgage payments will be, but the higher the total amount of interest you'll pay over the life of the mortgage.

A mortgage term is the length of time you agree to a specific mortgage interest rate and a set payment schedule. A mortgage term can range from as little as 6 months to as long as 10 years. At the end of a term, you can agree to a new interest rate and payment schedule (renew the mortgage), or you can pay off your mortgage in full.

You may have several mortgage terms during the amortization period.

What's the difference between a fixed rate mortgage and a variable rate mortgage?

A fixed rate mortgage allows you to lock in a specific annual interest rate for a certain period of time, known as the term. Terms range from 6 months to 10 years. The interest rate and the payments on the mortgage remain the same for the length of your term. As you make payments and the principal amount is reduced, more of the mortgage payment is applied to the principal and less of the payment is applied to the interest. Because the interest rate does not change throughout the term, you know in advance the amount of interest you will pay and how much principal you will owe at the end of your term.

With a variable rate mortgage, the annual interest rate is based on the Bank's Prime Rate plus or minus a specified percentage. The interest rate changes with the Bank's Prime Rate. Variable mortgage terms range from 3 or 5 years. The regular mortgage payment is a fixed amount. As interest rates fall more of the payment is applied to the principal, and as rates rise, more of the payment is applied to the interest. The regular mortgage payment may be adjusted if the amount of your payment is not enough to cover the interest portion of the payment. Because the interest rate changes, it is not possible to know in advance how much interest you will pay and how much principal you will owe at the end of your term. You can convert a variable rate mortgage into a fixed rate mortgage of the same or longer term at any time during your term without additional cost.

My mortgage is up for renewal, what should I do?

This means that your mortgage term has come to an end and you can renegotiate for a new interest rate, term, and payment schedule. This is also the time to make a larger payment (lump sum payment) without pre-payment penalties on your mortgage to help pay it off sooner.

  • New to HSBC? Call an HSBC mortgage advisor at 1-888-310-4722 or visit your local branch
  • Already an HSBC client? You may be eligible for a preferred rate as an HSBC Premier1 or HSBC Advance2 client.

Learn more about HSBC Premier
Learn more about HSBC Advance

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Call 1-866-609-4722

Hours of Operation
Mon-Fri 6am-6pm PST