How Much Mortgage Can You Get for Your Current Calgary Rental Payment? 

Using today’s best 5-year mortgage interest rate of about 1.64% and an amortization period of 30 years, the chart below shows how much of a mortgage your monthly rental payments would carry.

Rent and Mortgage Amount The Rent Would Carry at 1.64% amortized over 30 Years

• $1,000 - $284,408

• $1,200 - $341,289

• $1,400 - $398,171

• $1,600 - $455,053

• $1,800 - $511,934

• $2,000 - $568,816

• $2,200 - $625,698

• $2,400 - $682,579

Why are you renting instead of owning?

Get Pre-Qualified and Lock In The Low-Interest Rates.

Talk with your mortgage broker today and find out the truth about your unique situation. There are a lot of options available, even if you don’t have a down payment.

Maybe you could buy the house you are currently renting. Calgary Landlords love owning properties for a reason. And it’s the same reason you should own your own home instead of renting.

It’s a fact that many rental properties once were the primary residences of current landlords.  

A great way to look at buying your first home is to ask yourself, “What’s the Worst That Can Happen and Can I Deal With It”?

The worst that can happen is you could no longer make the mortgage payments, and you would lose the house to the bank and ruin your credit. But even that doesn’t happen overnight, so you would have plenty of time to try to sell the place, rent it out, get a roommate, etc. There’s actually a lot of options in the worst-case scenario.

The best way to avoid foreclosure is to make your payments. If you stay within the range of what you’ve been paying for rent, that shouldn’t be a problem. Don’t take on more than you can afford.

Take the first step today, and talk with a qualified Calgary Mortgage Agent.

If a mortgage agent wants you to borrow the maximum you might qualify for, instead of keeping you in the range you’re comfortable with, run away. This is not the type of mortgage agent you would want to deal with.

The bottom line is if you can afford the rent and have always paid on time, you are a good candidate for homeownership. And homeownership is a great thing to have; just ask your Calgary Landlord.

Paying Off Your Calgary Mortgage Faster

One of the highest financial priorities of Canadian homeowners is to pay off their mortgage as quickly as possible. Paying down extra principal in the early years can shorten the life of your mortgage and dramatically lower the interest you will pay over the long haul. “Pay-Off Tips” below describes some of the most effective methods that you can apply based on your situation.

1. Mortgage payments made with After-Tax Cash

More Canadians are becoming aware that since mortgage interest is not tax-deductible in Canada you are making mortgage payments of both principal and interest with money that you have already paid tax on after-tax dollars”. This makes it even more important to eliminate the drainage of disposable income as soon as possible!

2. Prepayments give a great return on investment

If you pay an average of 6.5% in mortgage interest, for each $1,000 by which you reduce your mortgage principal, you will save $65 in after-tax cash every year. If you are paying taxes at a marginal rate of 40%, you must earn $108.33 each year to pay the interest on every $1,000 of principal outstanding...a heavy burden, but also a tremendous implied benefit to reducing this balance. In fact, the example shows that the “return on investment” for making prepayments on your mortgage is 10.833% before tax and 6.5% after tax or better than most fixed-return investments (bonds, GIC’s etc.).

3. Increase your payment annually to the most you can afford

The upside is that most lenders will allow you to reduce it again to the previous level if it turns out to be too great a burden or your circumstances change.

4. Utilize your RRSP-driven tax rebate as a mortgage prepayment method

Even if you can only prepay annually, make sure these funds are set aside for that purpose. Many Canadians will borrow (at prime) to buy an RRSP to ensure the maximum rebate. When applied to the mortgage principal, this refund is a “gift that keeps on giving”. Combining the refund with the tax-free interest earned on the RRSP over the subsequent years will quickly outpace the short-term interest costs of the RRSP loan.

5. Increase the frequency of your payments

Make accelerated bi-weekly payments to get a “free” principal reduction equivalent to one full mortgage payment every year — painlessly. Unless you are paid weekly it makes little sense to make weekly payments. All you would be doing is making a smaller payment and deferring the difference for a week.

6. Make use of double-up privileges wherever possible

Tell yourself that you will “skip a payment” whenever necessary... then skip only when you absolutely must.

7. Round your payments up

By adding even, a nominal amount of say, $10 per payment, the amount of interest you are saving will be unbelievable, and the extra money is relatively painless to part with.

8. Pay a lump sum whenever possible

By decreasing the principal of the mortgage, your payments will not be allocated as much to interest in the future, thereby accelerating your freedom to a mortgage-free life.

9. Keep payments the same when mortgage rates have fallen

If the payment amount has not been a problem so far, then keep it the same thus paying down the principal faster.

10. Raise payments in line with increased income on an after-tax basis

If your income increases, do not keep your mortgage payments the same. Although disposable income may be fun to spend on unnecessary luxuries in the short-term, the long-term benefits of being mortgage-free faster and saving those interest payments will far outweigh the short-term curtailing — just pretend that your income did not increase and maintain your usual lifestyle.

Do not waste your hard-earned money on interest! These methods have allowed many people to shorten their mortgage life by years in a short period and enjoy a greater lifestyle for a longer period.

Obtaining A Mortgage After Bankruptcy Isn’t As Problematic As You Think

Bankruptcy is on the rise in Calgary, with 8.5% more bankruptcies filed during the first quarter of 2019 compared to the same period of 2018. The Edmonton Journal reports that locals are finding it difficult to make ends meet and, as a result, are losing their personal possessions, including their cars and homes. But even if you do lose your home following your bankruptcy filing, it doesn’t mean that you can’t take out a mortgage and become a Calgary homeowner again in the future.

Get discharged 

In order to qualify for a mortgage so that you can purchase a home in Calgary, your bankruptcy will need to be discharged. This means that you will have met the terms of the discharge which typically include paying back some of what you owe. The Canadian government stipulates that if you have $200 surplus income per month, then 50% must be paid to your creditors. A bankruptcy of this type will typically last 21 months before the discharge is issued. By following the rules of your bankruptcy, you’ll show that you are responsible with your cash and want to pay back what you owe. At this point, avoid debt management companies as they have a high failure rate and can draw out your bankruptcy longer, thus preventing you from getting back on the property ladder.

Rebuild your credit 

Once you’ve been discharged for two years, you are eligible for a mortgage on your dream Calgary home. To ensure that it is a success, you’ll need to boost your credit. The longer you spend building your credit up, the better it will be when the time comes to apply for a home loan. Credit cards are a great way to improve your credit, but you must ensure that you are sensible with your lending and pay back the full amount every month, otherwise, you risk damaging your credit further. Ideally, two years’ worth of credit is required to get a competitive rate on your mortgage, but there’s no need to worry if you don’t quite make the mark.

Start saving 

As a general rule, you’ll need at least a 5% down payment on any property in Calgary that you wish to buy. Some mortgage companies will also consider you if you have a larger down payment but haven’t yet been discharged for two years or can’t show two years of credit. Either way, you’ll need to save hard if you want to put your bankruptcy behind you for good. One way to do this is to open a bank account which doesn’t have any fees and has a decent interest rate. Setting up a standing order so that a sizeable sum of cash regularly goes into the account is recommended, too.

Shopping for your new Calgary home 

When the time comes to shop for a new home, you need to carefully consider which type of property you require. Always ensure that you will be able to comfortably pay the mortgage repayments, household running costs, and additional expenses on the property that you’re thinking of buying. This may mean you opt for a property smaller than what you previously owned. A realtor which has a variety of properties on its books can offer a surge of advice and will happily discuss your requirements and show you multiple properties to help you find your perfect home. 

Many people think that when they’ve been declared bankrupt they can’t become a homeowner again. Thankfully, this belief is incorrect and it’s possible to obtain a mortgage and get the keys to a Calgary property within just a few years of bankruptcy occurring.