Lowering Your Overall Cost of Borrowing

Michael Q. Blair • February 15, 2022

If you’re like most Canadians, chances are you don’t have enough money in the bank to buy a property outright. So, you need a mortgage. When you’re ready, it would be a pleasure to help you assess and secure the best mortgage available. But until then, here’s some information on what to consider when selecting the best mortgage to lower your overall cost of borrowing.

When getting a mortgage, the property you own is held as collateral and interest is charged on the money you’ve borrowed. Your mortgage will be paid back over a defined period of time, usually 25 years; this is called amortization. Your amortization is then broken into terms that outline the interest cost varying in length from 6 months to 10 years. From there, each mortgage will have a list of features that outline the terms of the mortgage.

When assessing the suitability of a mortgage, your number one goal should be to keep your cost of borrowing as low as possible. And contrary to conventional wisdom, this doesn’t always mean choosing the mortgage with the lowest rate. It means thinking through your financial and life situation and choosing the mortgage that best suits your needs.

Choosing a mortgage with a low rate is a part of lowering your borrowing costs, but it’s certainly not the only factor. There are many other factors to consider; here are a few of them:

How long do you anticipate living in the property? This will help you decide on an appropriate term.
Do you plan on moving for work, or do you need the flexibility to move in the future? This could help you decide if portability is important to you.
What does the prepayment penalty look like if you have to break your term? This is probably the biggest factor in lowering your overall cost of borrowing.
How is the lender’s interest rate differential calculated, what figures do they use? This is very tough to figure out on your own. Get help.
What are the prepayment privileges? If you’d like to pay down your mortgage faster.
How is the mortgage registered on the title? This could impact your ability to switch to another lender upon renewal without incurring new legal costs, or it could mean increased flexibility down the line.
Should you consider a fixed rate, variable rate, HELOC, or a reverse mortgage? There are many different types of mortgages; each has its own pros and cons.
What is the size of your downpayment? Coming up with more money down might lower (or eliminate) mortgage insurance premiums, saving you thousands of dollars.

So again, while the interest rate is important, it’s certainly not the only consideration when assessing the suitability of a mortgage. Obviously, the conversation is so much more than just the lowest rate. The best advice is to work with an independent mortgage professional who has your best interest in mind and knows exactly how to keep your cost of borrowing as low as possible.

You will often find that mortgages with the rock bottom, lowest rates, can have potential hidden costs built in to the mortgage terms that will cost you a lot of money down the road. Sure, a rate that is 0.10% lower could save you a few dollars a month in payments, but if the mortgage is restrictive, breaking the mortgage halfway through the term could cost you thousands or tens of thousands of dollars. Which obviously negates any interest saved in going with a lower rate.

It would be a pleasure to walk you through the fine print of mortgage financing to ensure you can secure the best mortgage with the lowest overall cost of borrowing, given your financial and life situation. Please connect anytime!

< Older Post Newer Post >

Michael Q. Blair

Mortgage Planner

BOOK A CALL

How To Avoid An Accidental Home Purchase

By Michael Q. Blair • October 21, 2025

Buying a property might actually be easier than you think. So, if you have NO desire AT ALL to qualify for a mortgage, here are some great steps you can take to ensure you don’t accidentally buy a property. Fair warning, this article might get a little cheeky. Quit your job. First things first, ditch that job. One of the best ways to make sure you won’t qualify for a mortgage is to be unemployed. Yep, most mortgage lenders aren’t in the practice of lending money to unemployed people! If you already have a preapproval in place and don’t want to go through with financing, no problems. Unexpectedly quit your job mid-application. Because, even if you’re making a lateral move or taking a better job, any change in employment status can negatively impact your approval. Spend All Your Savings. To get a mortgage, you’ll have to bring some money to the table. In Canada, the minimum downpayment required is 5% of the purchase price. Now, if the goal is not to get a mortgage, spending all your money and having absolutely nothing in your account is a surefire way to ensure you won’t qualify for a mortgage. So, if you’ve been looking for a reason to go out and buy a new vehicle, consider this your permission. Collect as Much Debt as Possible. After quitting your job and spending all your savings, you should definitely go out and incur as much debt as possible! The higher the payments, the better. You see, one of the main qualifiers on a mortgage is called your debt-service ratio. This takes into count the amount of money you make compared to the amount of money you owe. So the more debt you have, the less money you’ll have leftover to finance a home. Stop Making Your Debt Payments So let’s say you can’t shake your job, you still have a good amount of money in the bank, and you’ve run out of ways to spend money you don’t have. Don’t panic; you can still absolutely wreck your chances of qualifying for a mortgage! Just don’t pay any of your bills on time or stop making your payments altogether. Why would any lender want to lend you money when you have a track record of not paying back any of the money you’ve already borrowed? Provide Ugly Supporting Documentation. Now, if all else fails, the last chance you have to scuttle your chances of getting a mortgage is to provide the lender with really ugly documents. To support your mortgage application, lenders must complete their due diligence. Here are three ways to make sure the lender won’t be able to verify anything. Firstly, and probably the most straightforward, make sure your name doesn’t appear anywhere on any of your statements. This way, the lender can’t be sure the documents are actually yours or not. Secondly, when providing bank statements to prove downpayment funds, make sure there are multiple cash deposits over $1000 without explaining where the money came from. This will look like money laundering and will throw up all kinds of red flags. And lastly, consider blacking out all your “personal information.” Just use a black Sharpie and make your paperwork look like classified FBI documents. Follow-Through So there you have it, to avoid an accidental home purchase, you should quit your job, spend all your money, borrow as much money as possible, stop making your payments, and make sure the lender can’t prove anything! This will ensure no one will lend you money to buy a property! Now, on the off chance that you’d actually like to qualify for a mortgage, you’ve come to the right place. The suggestion would be to actually keep your job, save for a downpayment, limit the amount of debt you carry, make your payments on time, and provide clear documentation to support your mortgage application! If you'd like to make sure you're on the right track, connect anytime. It would be a pleasure to walk through the mortgage process with you.

How to Raise Your Credit Score and Unlock Better Rates

By Michael Q. Blair • October 7, 2025

Want a Better Credit Score? Here’s What Actually Works Your credit score plays a major role in your ability to qualify for a mortgage—and it directly affects the interest rates and products you’ll be offered. If your goal is to access the best mortgage options on the market, improving your credit is one of the smartest financial moves you can make. Here’s a breakdown of what truly matters—and what you can start doing today to build and maintain a strong credit profile. 1. Always Pay On Time Late payments are the fastest way to damage your credit score—and on-time payments are the most powerful way to boost it. When you borrow money, whether it’s a credit card, car loan, or mortgage, you agree to repay it on a schedule. If you stick to that agreement, lenders reward you with good credit. But if you fall behind, missed payments are reported to credit bureaus and your score takes a hit. A single missed payment over 30 days late can hurt your score. Missed payments beyond 120 days may go to collections—and collections stay on your report for up to six years . Quick tip: Lenders typically report missed payments only if they’re more than 30 days overdue. So if you miss a Friday payment and make it up on Monday, you're probably in the clear—but don't make it a habit. 2. Avoid Taking On Unnecessary Credit Once you have at least two active credit accounts (like a credit card and a car loan), it’s best to pause on applying for more—unless you truly need it. Every time a lender checks your credit, a “hard inquiry” appears on your report. Too many inquiries in a short time can bring your score down slightly. Better idea? If your current lender offers a credit limit increase , take it. Higher available credit (when used responsibly) actually improves your credit utilization ratio, which we’ll get into next. 3. Keep Credit Usage Low How much of your available credit you actually use—also known as credit utilization —is another major factor in your score. Here’s the sweet spot: Aim to use 15–25% of your limit if possible. Never exceed 60% , especially if you plan to apply for a mortgage soon. So, if your credit card limit is $5,000, try to keep your balance under $1,250—and pay it off in full each month. Maxing out your cards or carrying high balances (even if you make the minimum payment) can tank your score. 4. Monitor Your Credit Report About 1 in 5 credit reports contain errors. That’s not a small number—and even a minor mistake could cost you when it’s time to get approved for a mortgage. Check your report at least once a year (or sign up for a monitoring service). Look for: Incorrect balances Accounts you don’t recognize Missed payments you know were paid You can request reports directly from Equifax and TransUnion , Canada’s two national credit bureaus. If something looks off, dispute it right away. 5. Deal with Collections Fast If you spot an account in collections—don’t ignore it. Even small unpaid bills (a leftover phone bill, a missed utility payment) can drag down your score for years. Reach out to the creditor or collection agency and arrange payment as quickly as possible . Once settled, ask for written confirmation and ensure it’s updated on your credit report. 6. Use Your Credit—Don’t Just Hold It Credit cards won’t help your score if you’re not using them. Inactive cards may not report consistently to the credit bureaus—or worse, may be closed due to inactivity. Use your cards at least once every three months. Many people put routine expenses like groceries or gas on their cards and pay them off right away. It’s a simple way to show regular, responsible use. In Summary: Improving your credit score isn’t complicated, but it does take consistency: Pay everything on time Keep balances low Limit new credit applications Monitor your report and handle issues quickly Use your credit regularly Following these principles will steadily increase your creditworthiness—and bring you closer to qualifying for the best mortgage rates available. Ready to review your credit in more detail or start prepping for a mortgage? I’m here to help—reach out anytime!