Whether you're buying your first home or your next one, understanding how mortgage basics work can make a big difference. Here's a quick breakdown of what you should know if you're buying in Ottawa.

 
DOWN PAYMENT
In most cases, buyers aim to put 20% down, but you can absolutely purchase with as little as 5% in Canada if you're a First Time Home Buyer. The more you put down, the less you'll need to borrow, which means lower monthly payments. Plus, if you’re able to put down 20% or more, you’ll also avoid CMHC mortgage insurance, which helps reduce your monthly costs even further.

 
LOAN TERM (aka Amortization)

In Canada, most buyers choose a 25-year amortization, but there are shorter options like 20 or 15 years if you'd like to pay off your mortgage faster and save on interest over time. As of 2024, first-time buyers purchasing newly built homes may also qualify for a 30-year amortization, which can help lower monthly payments and improve affordability.

MORTGAGE TYPE
You’ll typically choose between a fixed-rate and variable-rate mortgage:

Fixed-Rate: Your rate and payments stay the same for the entire term. Great for budgeting and peace of mind.

Your mortgage term is different than the amortization term, it's the length of time your interest rate is locked in. In Ottawa, 5-year fixed terms are the most common, but shorter terms or variable-rate options might be a better fit depending on your goals and the current market conditions.

Variable-Rate: Your rate can fluctuate with the market. It often starts lower, and some buyers use this option to save money in the early years.
There are also open and closed mortgages. Open gives you more flexibility to pay it off early, while closed tends to offer better rates.

Your mortgage broker or lender can walk you through the best fit for your lifestyle and long-term plans.

 
INTEREST RATE

The rate you qualify for will depend on factors like your credit score, income, down payment amount, and current lender policies. Rates are also heavily influenced by the Bank of Canada’s key interest rate, which impacts what lenders offer on both fixed and variable mortgages. Even a small change in rate can make a noticeable difference in your monthly payment, so it’s always worth shopping around or better yet, working with a great mortgage broker who can do that legwork for you and help you find the best fit for your situation.

 
PROPERTY TAXES
Ottawa property taxes vary depending on the area and assessed home value. The average tax rate is around 1%, but this can shift based on location and property type. When you’re budgeting monthly payments, don’t forget to factor this in.

 
HOME INSURANCE
Your lender will likely require you to have home insurance before closing. This protects your home (and the lender’s investment) from fire, damage, and other risks. It’s smart to shop around for quotes once you have an accepted offer.

 
CONDO/ASSOCIATION FEES
If you’re buying a condo or a home in a managed community, you may have monthly fees. These can cover things like snow removal, landscaping, building maintenance, or shared amenities. Make sure to factor this into your budget and understand what it covers!