A mortgage is a hefty loan you acquire to purchase a property. Taking out your first mortgage can be daunting, especially if you don’t know what to watch out for. You don’t want to end up in over your head with impossible interest, but our real estate team is here to make sure that won’t happen with your first Toronto mortgage.

What is a First Mortgage?

Your first mortgage is your first loan afforded to you by a financial institution such as a bank, or a B lender company. The cost of housing in Toronto is rising every year, so there is less and less of the population with the means to pay millions of dollars in full. This is when these people seek out a mortgage.

toronto houses


You will borrow the bulk of the amount from the lender of your choice and slowly pay it back–with interest, of course.

How Does it Work?

A first mortgage is the most important mortgage, which will be considered above your second and even third one, just in case you default.

The mortgage will put your property up as a lien for the bank or financial institution of your choice. This will mean that the same institution will have a lien against your property until you have paid off your debt. There will be contracts involved stipulating the events if you cannot pay your back the loan.

house and calculator

The first and second mortgage differs from each other in the sense that the first mortgage does not give the lender ownership of your home. You are still able to renovate your property to your heart’s content, and even take out a second mortgage if necessary. 

The first mortgage is the first consideration if you default, which means the more mortgages you take out on your property, the more assurance you will have to provide the lender. Our team says you can do it through impeccable credit or proof of employment–anything to give the lender peace of mind. 

(Want to know why mortgage broker is important? Then, you can check our page about why you should use a mortgage broker here to give you some clarifications)

Getting a First Mortgage in Toronto

There are a few steps you need to take before you can be approved for your first Toronto mortgage. You will need to prepare a large sum as a down payment, which is usually around 20% of the property’s total cost. Our property agents have seen people with very good credit scores manage to secure mortgages with only around 10% down.

Once you have secured that initial bulk of cash, you will then need to provide the lender with documentation. They could ask for your ID, proof of employment, list of assets, and more.

toronto buildings

You can then decide on the best course to take with your lender. Open mortgages are more flexible with repayments, while closed mortgages are more set in stone. You would also then decide the amortization period, which is how long your mortgage will last.

How frequent are your payments? This is another factor you can decide on, as well as the mortgage rate.

Since amortization [1] is a very long stretch of time, mostly around 20 – 25 years, your mortgage contract will be split into a few intervals. It’s important to renew it before the contract is up.

Pros and Cons of a First Mortgage in Toronto

A first mortgage can help you realize your dream of owning a home. If you borrow from a bank with a good credit rate under your belt, then it can be a more affordable option. You can also get some incentives from the government as a first-time homebuyer.

family unboxing in a new house

The biggest con of first Toronto mortgages is the interest rate. Over time, you will end up paying back much more than you initially borrowed. There could also be some hidden fees or extra fees required by the specific lender you choose. Unfortunately, there is little many people can do if they want to own property. 


The skyrocketing housing prices leave very few options for housebuyers. A first mortgage is a lifeline for those who want to purchase a property. You must first ready a down payment, around 20% of the total cost. The rest of the mortgage terms can be determined with your lender once you have submitted all your details. 

Foster Mendez

Leave a Reply

Your email address will not be published.

sixteen − 15 =