Know your numbers before you sign.

Fixed rates track Government of Canada bond yields; variable rates move when the Bank of Canada changes its policy rate. Nobody can honestly promise you where either will be in six months. What I can do is show you what happens to your payment if rates rise or fall, and find the lenders competing hardest for your kind of file this week.

As a rule of thumb, most Canadian lenders will lend up to roughly 4 to 4.5 times your gross household income, depending on your debts, your down payment and the stress test rate. The exact number comes from two debt-service ratios: GDS (housing costs under 39% of income) and TDS (all debts under 44%). A 15-minute call will give you a real number based on your actual paperwork.

On a $500,000 mortgage at 4.5% paid off over 25 years, the monthly payment is roughly $2,765. Switch that to accelerated bi-weekly and you pay about $1,382 every two weeks, shaving roughly three years off the mortgage and saving thousands in interest. Slide the numbers in the calculator below to see yours.

A fixed rate gives you a payment that never changes for the term, which protects your budget. A variable rate can float lower when the central bank cuts, but your payment or balance rises when rates go up. If a higher payment would keep you awake at night, choose fixed. If you want the option to break the mortgage cheaply, variable penalties are usually just three months of interest, compared with potentially large interest-rate-differential penalties on fixed mortgages.

In Canada, 5% on the first $500,000 and 10% on the portion between $500,000 and $1.5 million. Homes of $1.5 million or more require a full 20% down. If you put down less than 20%, your mortgage must be insured by CMHC, Sagen or Canada Guaranty; the premium is rolled straight into the mortgage balance so you don't pay it out of pocket upfront.

Prime lenders look for a score of 680 or higher for their best rates, though insured mortgages can sometimes be approved around 600. Below 600, we look to alternative (B) lenders or credit unions, which focus more on equity and income than the score alone. Checking your score through a broker like me does not hurt your credit rating.

A pre-approval locks in an interest rate for 90 to 120 days while you look at homes. If rates go up, your rate is protected. If rates drop, you get the lower rate. It also confirms your maximum purchase price, so you make offers with confidence. A true pre-approval involves reviewing your paystubs and debts, not just a five-minute online form.

Canadian law requires lenders to qualify you at a higher rate than the one you will actually pay: either 5.25% or your contract rate plus 2%, whichever is higher. This proves you could still afford your home if rates rose. It lowers your maximum borrowing amount, which is why having an agent run the test on several lenders helps find the most generous fit.

Most lenders let you renew with them early (often 120 to 180 days out) with no penalty. If you break your mortgage before that window to move to a different lender, variable penalties are typically three months of interest, while fixed-rate penalties are calculated using an Interest Rate Differential (IRD) that can cost thousands. I can calculate your exact break fee and tell you whether a lower rate makes breaking worthwhile.

A bank representative can only sell you the mortgages their employer offers. A licensed mortgage agent works for you, taking your file to dozens of competing lenders (including major banks, credit unions, and monoline lenders who only work through brokers). For standard residential mortgages, my service is free to you because the lender compensates the brokerage upon closing.