Mortgage financing differs in each country. Some of the important aspects of Canadian mortgages are as follows:

• Canadian Banks are governed by the Bank Act which does not allow them to advance more than 80% of the purchase price of a home on their own - a conventional mortgage. They can exceed that amount if the mortgage is insured by either Canada Mortgage and Housing (CMHC) or GE Capital. This insurance allows the Lender to advance up to 100% of the purchase price for Canadians or landed immigrants. If you are here on a work visa, the maximum the lender can advance is 90%. There is an insurance premium charged for this. The less down, the greater the risk, therefore the higher the premium. It is charged once, added to the mortgage and you don’t pay it again as long as you own the home.
  
  
• No "points" to set up. The cost to set up a conventional mortgage is the appraisal - approximately $250 if it is a hi-ratio mortgage. There is 8% PST charged on the insurance premium. PST is part of the closing costs.
  
  
• The term is not the same as the amortization. The terms run from 6 months to 5 years; 7 and 10 year terms are also available, but the rate is higher. The shorter the term, the lower the rate - usually. The maximum amortization is 40 years. There is no maximum or cap on the rate at the end of the term. Variable mortgages also available; open, closed, or capped.
  
  
• The mortgage is closed for the term chosen against total repayment; however, there are prepayment privileges to repay sooner which depend on the lender. Bi-weekly payments, etc. are also available. Open mortgages are available for a maximum 1 year term at higher rates. The penalty to repay a closed mortgage is 3 months of interest, or the loss of interest, whichever is greater. The interest differential - loss of interest penalty is greater when rates decline.
  
  The interest on Canadian mortgages is not tax deductible.
  
  
• If you are here on a work visa, many lenders advance to 65% on a conventional mortgage, a few will go to 80%. You can be financed up to 90% on an insured mortgage provided your income is at least $60,000 and you are transferred with a company or starting with a company in a similar line of work.
  
  
• Documentation required: credit bureau - from the US - or a letter of reference from your financial institution if from another country, letter of income confirming transfer, sale or guarantee of home along with mortgage statement to confirm equity; or bank statements to confirm downpayment; copy of work visa.