Begin by exploring your options here
How Much Mortgage Can I Afford?
Mortgage affordability
Calculating the maximum amount of money that you may be able to borrow is an important step in your search for a new home. In a few simple steps, learn how much of a mortgage you may qualify for with the HSBC Mortgage Prequalification Calculator.
Two easy calculations will help you determine your borrowing capacity:
- Calculating Total Debt Service (TDS) - According to the TDS, your maximum monthly debt load should not exceed 40% of your gross monthly household income.
- Calculating Gross Debt Service (GDS)- According to the GDS, your maximum monthly home-related expenses should not exceed 32% of your gross monthly household income.
Your situation
The TDS and GDS ratios are guidelines. Your situation is likely to change over the life of your mortgage and even within each mortgage term.
| Situation | Description |
|---|---|
| Multiple incomes |
If you are using two incomes to calculate your debt ratios, consider the possibility that you may have to rely on only one from time to time. Compare several options based on one of you incurring a temporary setback. |
| Income stability |
Consider the likelihood that you may experience some disruption in your income. Can you afford to keep up your payments using other means, such as personal savings? |
| Tax returns |
Tax returns should not be considered part of your income even if you participate in a group savings plan with predictable results. Consider using one-time sources of income, such as tax returns and bonuses to make lump sum payments on your mortgage principal instead. |
| Bonuses |
Employment bonuses should only be included in your income calculation as an estimate and only if you can predict the amount with some degree of certainty. |
| Situation |
Multiple incomes |
|---|---|
| Description |
If you are using two incomes to calculate your debt ratios, consider the possibility that you may have to rely on only one from time to time. Compare several options based on one of you incurring a temporary setback. |
| Situation |
Income stability |
| Description |
Consider the likelihood that you may experience some disruption in your income. Can you afford to keep up your payments using other means, such as personal savings? |
| Situation |
Tax returns |
| Description |
Tax returns should not be considered part of your income even if you participate in a group savings plan with predictable results. Consider using one-time sources of income, such as tax returns and bonuses to make lump sum payments on your mortgage principal instead. |
| Situation |
Bonuses |
| Description |
Employment bonuses should only be included in your income calculation as an estimate and only if you can predict the amount with some degree of certainty. |
Determining your monthly expenses
Home ownership comes with a lot of financial responsibilities. Your mortgage is just one of many expenses. Estimating all your expected costs is an important step in choosing a home that you can afford without sacrificing your commitment to other goals.
How much can I borrow?
Using the total monthly expenses figure from the budget calculator, estimate how much you can afford to borrow.
How Much Does HSBC Mortgage Creditor Insurance Cost?
Protect the things you love. Choose the Creditor Insurance protection that is right for you.
Finding The Right Home
Create something exceptional
The mortgage solution that you choose has to reflect the life you plan to create and how you take advantage of all of life’s opportunities. We offer a variety of mortgages and combination of lending solutions to that you can be in control of how you’re money is spent and how quickly you can become mortgage free. Choosing the right home is a personal decision that should be considered carefully because the reward of an informed choice will last for years and perhaps generations.
Defining your home buying strategy
Some people hunt for a dream home where they can spend the rest of their lives. Others look for an affordable way to start building equity in real estate. Others are willing to speculate on rising prices with the hope of earning short- or long-term profit.
Before recommending any solution, an HSBC Mortgage Specialist will take the time to understand your home-buying goals and then help you make the best decision.
Find the house of your dreams
Step 1: Research your neighbourhood
Once you've narrowed down where you want to live, get to know the area - talk to people who live there and visit the neighbourhood at different times of the day and week to get a feel for who lives there and noise levels.
Find an agent with local knowledge. It costs you nothing to register with an agent - simply look for local realtors online or in the property pages of local newspapers or reach out to trusted friends in your social network. Always ask for a referral when choosing your agent.
Can't find what you're looking for? Consider purchasing a fixer-upper, or hire a contractor and build a home yourself.
Step 2: View properties
To have a successful viewing of a property, remember the following:
- Don't get carried away by your initial excitement.
- Don't let yourself be persuaded by the owners or real estate agent. It's OK to ask for a second viewing to assess the property on your own.
- In a competitive market, take a home inspector with you if you are serious about buying a particular property. Expect to pay for his or her time but consider it an investment in your future.
- Make note of any observations or concerns you may have about the property and discuss them with your Realtor or inspector. Seasoned pros can easily estimate the cost of addressing structural or cosmetic concerns.
- Remember that one of the most valuable sources of information can be the present owners.
- If it is an older property, when was it re-wired? Some insurance companies will insist on upgrading out-of-date electrical systems such as “knob & tube” wiring.
- If there are larger new items, such as a furnace, ask if the guarantee is transferable to the new owner.
- Ask what general maintenance has been done. If the current buyer has a maintenance contract for heating and cooling equipment, you can ask to see the service records.
- Inquire about the property's running costs.
- Find out the amount of the monthly gas and electricity bills.
- Make a note of the property tax. This information is usually found on the property listing.
- Find out what is included in the owners' asking price. Your Realtor can help you understand the difference between “fixtures”, which are often not included and “chattels”, which are typically considered part of the structure and included in the sale price.
Step 3: Make an Offer
Base your offer on what the property is worth to you, taking into account renovation or repair costs. Submit your offer to your real estate agent, and include any conditions your offer is subject to, such as:
- Financing (remember to get pre-approved!)
- A home inspection
- Other conditions important to you (you may want the washer/dryer removed, or want to keep the living room drapes)
Next steps
Once your offer is accepted, you are ready to close the deal.
House or condominium?
| Considerations | Condominium |
House |
|---|---|---|
| Maintenance |
Virtually all of your maintenance costs will be covered by one monthly fee. Fees may increase over time and you may or may not have a say on how the budget is spent. |
Maintenance and repair are out-of-pocket expenses when you own a house. Urgent repairs will require immediate access to cash or available credit. However, you are in control of the cost and timing of renovations and updates. |
| School districts |
Whether you buy a condominium or a house, it’s important to plan ahead if one of your goals is to start a family. Many municipalities in Canada are struggling to deal with increased population density and the result is uncertainty about access to local schools for all residents. Homes in what are considered ‘good school districts’ typically cost more and may hold their value better when markets fluctuate. |
Whether you buy a condominium or a house, it’s important to plan ahead if one of your goals is to start a family. Many municipalities in Canada are struggling to deal with increased population density and the result is uncertainty about access to local schools for all residents. Homes in what are considered ‘good school districts’ typically cost more and may hold their value better when markets fluctuate. |
| Outdoor Space |
Modern condominiums are recognizing the need for outdoor and shared spaces but your access to private outdoor space will be limited. |
Houses typically have larger, private outdoor space, which many parents and pet owners consider essential. |
| Parking | Parking spots must be purchased and it can be difficult to acquire more than two. In major cities, the price a single parking spot can easily exceed $30,00, just slightly more than the cost of the average car in Canada. |
Downtown homes may offer limited parking options but there are no fees for parking privileges on your own property. If you own multiple vehicles, look into local rules regarding street parking and front-pad parking options. |
| Commuting |
Condos are often the choice for urban buyers and the result is shorter commuting times and more access to public transit options. |
Larger homes are often located in areas that dictate longer commute times and additional expenses. With the average cost of car ownership reaching $9,500 a year, commuting is one of the highest household expenses for many Canadians. |
| Renovations and upgrades |
Minor interior renovations and upgrades may be permissible in some condominiums. However, you will not be able to increase your living space or make significant changes to your floor plan. |
Homes provide virtually unlimited options when it comes to renovation. This is attractive to many buyers who want to purchase a fixer-upper or pay for renovations to customize their space. |
| Considerations |
Maintenance |
|---|---|
| Condominium |
Virtually all of your maintenance costs will be covered by one monthly fee. Fees may increase over time and you may or may not have a say on how the budget is spent. |
| House |
Maintenance and repair are out-of-pocket expenses when you own a house. Urgent repairs will require immediate access to cash or available credit. However, you are in control of the cost and timing of renovations and updates. |
| Considerations |
School districts |
| Condominium |
Whether you buy a condominium or a house, it’s important to plan ahead if one of your goals is to start a family. Many municipalities in Canada are struggling to deal with increased population density and the result is uncertainty about access to local schools for all residents. Homes in what are considered ‘good school districts’ typically cost more and may hold their value better when markets fluctuate. |
| House |
Whether you buy a condominium or a house, it’s important to plan ahead if one of your goals is to start a family. Many municipalities in Canada are struggling to deal with increased population density and the result is uncertainty about access to local schools for all residents. Homes in what are considered ‘good school districts’ typically cost more and may hold their value better when markets fluctuate. |
| Considerations |
Outdoor Space |
| Condominium |
Modern condominiums are recognizing the need for outdoor and shared spaces but your access to private outdoor space will be limited. |
| House |
Houses typically have larger, private outdoor space, which many parents and pet owners consider essential. |
| Considerations | Parking |
| Condominium |
Parking spots must be purchased and it can be difficult to acquire more than two. In major cities, the price a single parking spot can easily exceed $30,00, just slightly more than the cost of the average car in Canada. |
| House |
Downtown homes may offer limited parking options but there are no fees for parking privileges on your own property. If you own multiple vehicles, look into local rules regarding street parking and front-pad parking options. |
| Considerations |
Commuting |
| Condominium |
Condos are often the choice for urban buyers and the result is shorter commuting times and more access to public transit options. |
| House |
Larger homes are often located in areas that dictate longer commute times and additional expenses. With the average cost of car ownership reaching $9,500 a year, commuting is one of the highest household expenses for many Canadians. |
| Considerations |
Renovations and upgrades |
| Condominium |
Minor interior renovations and upgrades may be permissible in some condominiums. However, you will not be able to increase your living space or make significant changes to your floor plan. |
| House |
Homes provide virtually unlimited options when it comes to renovation. This is attractive to many buyers who want to purchase a fixer-upper or pay for renovations to customize their space. |
Down payments
| Your down payment amount |
5% - 19.99% |
20% or more |
|---|---|---|
| Your mortgage options |
With less than a 20% mortgage, you will need to apply high-ratio mortgage Your down payment must be at least 5% of the house price (up to the first $500,000), and 10% for the following $500,000 - $999,999. |
With 20% or more you may qualify for a conventional mortgage. Homes that are valued greater than $1,000,000 require 20% or more for the down payment. |
| Implications |
A high-ratio mortgage requires you to purchase mortgage default insurance from an eligible provider, such as the Canadian Mortgage and Housing Corporation (CMHC) or Sagen Mortgage Insurance Company Canada (Sagen). |
A conventional mortgage does not require default insurance. That money can toward increasing your monthly budget or added to your savings. |
| Your down payment amount |
Your mortgage options |
|---|---|
| 5% - 19.99% |
With less than a 20% mortgage, you will need to apply high-ratio mortgage Your down payment must be at least 5% of the house price (up to the first $500,000), and 10% for the following $500,000 - $999,999. |
| 20% or more |
With 20% or more you may qualify for a conventional mortgage. Homes that are valued greater than $1,000,000 require 20% or more for the down payment. |
| Your down payment amount |
Implications |
| 5% - 19.99% |
A high-ratio mortgage requires you to purchase mortgage default insurance from an eligible provider, such as the Canadian Mortgage and Housing Corporation (CMHC) or Sagen Mortgage Insurance Company Canada (Sagen). |
| 20% or more |
A conventional mortgage does not require default insurance. That money can toward increasing your monthly budget or added to your savings. |
How to approach your down payment
The money that you have saved for a down payment can be used in several ways. If you want to avoid the cost of mortgage loan insurance, how you allocate your down payment will affect your home shopping budget.
A loan to value ratio of 95% would require a high-ratio mortgage, loan insurance and your monthly payments may be very high.
A loan to value ratio of 80% would qualify you for a conventional mortgage and your payments may be substantially lower.
A loan to value ratio of 95% would require a high-ratio mortgage, loan insurance and your monthly payments may be very high.
A loan to value ratio of 80% would qualify you for a conventional mortgage and your payments may be substantially lower.
Where you live, the kind of home you want to buy and market conditions will always be factors in how far you can stretch your down payment and whether you will quality for a conventional mortgage.
An HSBC Mortgage Specialist can help you calculate the best use of your hard-earned money.
The global view - More isn’t always better
A large down payment results in lower mortgage payments and lower lifetime borrowing cost. However, interest rates in Canada are historically low and have been for some time. Many homeowners make the strategic decision to invest capital in other asset classes instead of paying down low-interest mortgage debt.
This thought process applies to down payments made on vacation or investment properties. When the income from other investments outweighs the cost of borrowing, the difference can result in a net annual gain.
It’s a nice problem to have. We can help you solve it the right way.
Home Buyers’ Plan (HBP)
If you are buying or building a qualifying first home, you can withdraw up to $35,000 from your RRSP with no tax at the time of withdrawal and the amount will not be added to your annual income for tax purposes. You will be required to pay the money back within 15 years of withdrawal to avoid any taxes or penalties. Check with the Canada Revenue Agency for more information.
Choosing the right mortgage option
There are four essential questions that every homeowner should ask when working with a Mortgage Specialist to create the ideal financing options.
Amortization
Most mortgages start out with a 25-year amortization period. That means that the lifetime amount of principal and interest will be paid in full after 300 months. Choosing a shorter amortization will reduce the time it takes to eliminate your mortgage but your payments will be higher.
To see how a shorter amortization period could help you lower your lifetime cost of borrowing, use our Mortgage payment calculator and change the amortization period to compare a variety of scenarios.
Term
Your 25-year amortization period is typically divided over a number of terms. This works to everyone’s advantage because it’s virtually impossible to predict future interest rates.
Many homeowners choose five-year terms. That means 60 monthly payments. At the end of each term, a mortgage is considered ‘due’ and you have the option of paying it off with no penalties or fees or renewing for a new term.
Fixed or variable interest rates
| Rate |
Advantages |
Considerations |
|---|---|---|
| Fixed |
Your payments will be the same every month.
The amount of your payment applied to principle and interest will follow a predetermined schedule. |
Fixed interest rate mortgages are ideal for homeowners who want predictable payments without the need to monitor interest rates. |
| Variable |
Variable interest rates have traditionally lowered the cost of home ownership when rates are low and not fluctuating. |
If you are concerned that interest rates will rise quickly, choose a variable interest rates mortgage that can be converted to a fixed rate at any time within your current term. |
| Rate |
Fixed |
|---|---|
| Advantages |
Your payments will be the same every month.
The amount of your payment applied to principle and interest will follow a predetermined schedule. |
| Considerations |
Fixed interest rate mortgages are ideal for homeowners who want predictable payments without the need to monitor interest rates. |
| Rate |
Variable |
| Advantages |
Variable interest rates have traditionally lowered the cost of home ownership when rates are low and not fluctuating. |
| Considerations |
If you are concerned that interest rates will rise quickly, choose a variable interest rates mortgage that can be converted to a fixed rate at any time within your current term. |
Conventional or high-ratio
| Your down payment amount |
5% - 19.99% |
20% or more |
|---|---|---|
| Your mortgage options |
With less than a 20% mortgage, you will need to apply high-ratio mortgage Your down payment must be at least 5% of the house price (up to the first $500,000), and 10% for the following $500,000 - $999,999. |
With 20% or more you may qualify for a conventional mortgage. Homes that are valued greater than $1,000,000 require 20% or more for the down payment. |
| Implications |
A high-ratio mortgage requires you to purchase mortgage default insurance from an eligible provider, such as the Canadian Mortgage and Housing Corporation (CMHC) or Sagen Mortgage Insurance Company Canada (Sagen). |
A conventional mortgage does not require default insurance. That money can toward increasing your monthly budget or added to your savings. |
| Your down payment amount |
Your mortgage options |
|---|---|
| 5% - 19.99% |
With less than a 20% mortgage, you will need to apply high-ratio mortgage Your down payment must be at least 5% of the house price (up to the first $500,000), and 10% for the following $500,000 - $999,999. |
| 20% or more |
With 20% or more you may qualify for a conventional mortgage. Homes that are valued greater than $1,000,000 require 20% or more for the down payment. |
| Your down payment amount |
Implications |
| 5% - 19.99% |
A high-ratio mortgage requires you to purchase mortgage default insurance from an eligible provider, such as the Canadian Mortgage and Housing Corporation (CMHC) or Sagen Mortgage Insurance Company Canada (Sagen). |
| 20% or more |
A conventional mortgage does not require default insurance. That money can toward increasing your monthly budget or added to your savings. |
Mortgage Closing Costs
Step 1: Complete the purchase
Property valuation
When you are approved for a mortgage, a third-party valuation of the property is required (HSBC needs to know that the property you intend to buy represents good security for the mortgage loan). Once the valuation is complete, you receive a mortgage loan commitment letter from HSBC.
Conveyancing
Conveyancing is the legal process that transfers property from the existing owner to you. Following acceptance of your offer, you appoint a solicitor or notary to ensure that all the legal aspects of the transaction - including the title deeds, which are your proof of ownership - are in order.
Step 2: Finalize mortgage details
Before deciding on the type of mortgage you want, consider these additional options:
Do you want a fixed or variable rate?
Fixed rate mortgages protect you from rising interest rates and you'll know exactly what your payments will be Variable rate mortgages let you take advantage of a better interest rate when rates go down, but conversely, you pay less against your principal if rates go up.
When do you want to be mortgage-free?
Increase the payment frequency, term, and amortization of your mortgage to help meet your budgetary needs and pay down your mortgage faster.
Step 3: Sign off and prepare to move
Now is the time all parties sign an agreement for purchase and sale. At this stage, you pay the deposit, normally 5% to 10% of the purchase price. As soon as you know the possession date, choose a date for your move.
Reducing your mortgage payment
Over the life of your mortgage, you can expect your financial circumstances to fluctuate. There will be times when changes to your income or cash flow can be turned into opportunities to reduce the principal portion of your mortgage faster or lower your ongoing interest rate. In either case, you’ll be able to own your home, or grow your savings, faster.
3 easy ways to save money on your mortgage:
1. Take advantage of exclusive HSBC programs
2. Increase the amount and/or frequency of mortgage payments
Own your home faster with these simple payment strategies:
- Increase your mortgage payments by 20%, or pay up to 20% of the original balance each year, or match a regular payment3
- Reduce the number of years it takes to pay off your mortgage with more frequent payments (as the outstanding balance is reduced, less of your payment goes to interest and more goes towards the principal)
| Monthly |
Semi-Monthly | Accelerated Bi-Weekly |
Regular Bi-Weekly |
Accelerated Weekly |
Regular Weekly | |
|---|---|---|---|---|---|---|
| Payment amount |
$1,308.06 |
$654.30 |
$654.30 |
$603.31 | $327.15 |
$301.51 |
| Payment for Year |
12 | 24 | 26 | 26 |
52 |
52 |
| Mortgage Repaid |
$392,701.92 |
$392,884.28 |
$364,443.21 |
$390,875.03 |
$364,136.92 |
$390,692.38 |
| Mortgage-free in |
25 years |
25 years |
21 1/2 years |
25 years |
21 1/2 years |
25 years |
| Interest Paid (at same interest rate) |
$167,701.92 |
$167,321.40 |
$139,443.21 |
$165,875.03 |
$139,136.92 |
$165,692.38 |
| Amount of interest you would save |
$0 | $380 | $28,258 |
$1,826 |
$28,565 |
$2,009 |
|
Payment amount |
|
| Monthly |
$1,308.06 |
| Semi-Monthly |
$654.30 |
| Accelerated Bi-Weekly |
$654.30 |
| Regular Bi-Weekly |
$603.31 |
| Accelerated Weekly |
$327.15 |
| Regular Weekly | $301.51 |
|
Payment for Year |
|
| Monthly |
12 |
| Semi-Monthly | 24 |
| Accelerated Bi-Weekly |
26 |
| Regular Bi-Weekly |
26 |
| Accelerated Weekly |
52 |
| Regular Weekly | 52 |
|
Mortgage Repaid |
|
| Monthly |
$392,701.92 |
| Semi-Monthly |
$392,884.28 |
| Accelerated Bi-Weekly |
$364,443.21 |
| Regular Bi-Weekly |
$390,875.03 |
| Accelerated Weekly |
$364,136.92 |
| Regular Weekly |
$390,692.38 |
|
Mortgage-free in |
|
| Monthly |
25 years |
| Semi-Monthly |
25 years |
| Accelerated Bi-Weekly |
21 1/2 years |
| Regular Bi-Weekly |
25 years |
| Accelerated Weekly |
21 1/2 years |
| Regular Weekly | 25 years |
|
Interest Paid (at same interest rate) |
|
| Monthly |
$167,701.92 |
| Semi-Monthly |
$167,321.40 |
| Accelerated Bi-Weekly |
$139,443.21 |
| Regular Bi-Weekly |
$165,875.03 |
| Accelerated Weekly |
$139,136.92 |
| Regular Weekly |
$165,692.38 |
|
Amount of interest you would save |
|
| Monthly |
$0 |
| Semi-Monthly | $380 |
| Accelerated Bi-Weekly |
$28,258 |
| Regular Bi-Weekly |
$1,826 |
| Accelerated Weekly |
$28,565 |
| Regular Weekly |
$2,009 |
3. Apply HSBC Mastercard® Rewards Points
Use your HSBC Mastercard® Rewards Points as credits and let your daily shopping help pay down your mortgage faster.
Mortgage Pre-approval
Get pre-approved and shop with an advantage
A no cost, no-obligation pre-approval gives you several advantages in today’s competitive housing market.
When you get a Mortgage Pre-approval Letter4 for an HSBC mortgage, you’ll know exactly how much you can afford to spend on your first home. This empowers you to negotiate from a position of strength, knowing that financing will not be an issue when your offer is accepted.
How it works
The Mortgage Pre-approval Letter is an agreement between you and HSBC. Providing there are no changes to the information you present, you can count on receiving the money you need to buy your first home.
How long it applies
A pre-approval is valid for 120 days. If you do not find the perfect home in that time, you can easily renew your pre-approval assuming no substantial changes to your eligibility.
What to bring
Your time is valuable so an HSBC Mortgage Specialist can provide you with a list of the documentation you’ll need to provide. The information required may vary but typically includes the following.
- Proof of employment
- Social Insurance Number
- Personal tax returns
- Bank account information
- Credit history
- Financial statements, if self employed
- Gift letters if you are borrowing money from a relative
For a complete list of documentation, speak to a Mortgage Specialist at 1-866-609-4722, Mon-Fri from 6am-6pm PST.
Check your credit rating
You can check your own credit rating quickly and easily.
To find out how to obtain a copy of your credit bureau report, contact:
Buying Foreign Property
Expanding your global footprint
HSBC is the ideal place to start if you have your heart set on property abroad. Our global network connects to you to banking, financing and planning services in over 80 countries. An HSBC Mortgage Specialist will help you find the resources you need, show you how to manage your money from anywhere in the world and connect you with one of our local associates in your new location.
Get local advice, wherever you are
HSBC's International Banking Service representatives are available in over 80 countries. Take advantage of global HSBC experts who can help you to:
- Set up HSBC accounts and establish HSBC credit in your country of choice
- Recommend a good real estate agent or lawyer who is familiar with your preferred neighbourhood.
- Provide guidance on country-specific laws, practices and restrictions (there may be a minimum balance requirement to open an account)