12 February 2026

Introduction

Are you planning to buy a home in Quebec? Your mortgage will likely be one of the most important financial decisions of your life. Yet between mortgage types, rates, terms, conditions, and paperwork, it’s easy to feel overwhelmed.

In this article, you’ll learn everything you need to make an informed decision:

• the different types of mortgages
• the requirements to qualify
• practical tips to avoid unpleasant surprises

What Is a Mortgage in Quebec?

A mortgage is financing provided by a bank or financial institution to purchase a property. In return, the property serves as collateral for the loan.

In practical terms:

• You borrow an amount to buy a house, condo, or multi-unit property.
• You repay this amount through monthly payments, plus interest.
• If you don’t repay, the lender can seize the property (that’s the mortgage security).

In Quebec, the mortgage is generally signed before a notary, and the conditions (term length, rate, repayment options) vary depending on the lender and your financial situation.

Mortgage Types Available in Quebec

Before choosing your mortgage, it’s important to understand the different options available. The type of mortgage you choose has a direct impact on your monthly payments, your budget, and your peace of mind.

Here are the two most common types in Quebec.

Fixed-Rate Mortgage

With a fixed-rate mortgage, the interest rate stays the same throughout the term (often 1, 3, or 5 years). This means your monthly payments don’t change, regardless of market movements.

Advantages:

• You know exactly how much you pay each month.
• No surprises if interest rates rise.
• Ideal if you have a tight budget or want stability.

Disadvantages:

• The fixed rate is often higher initially than a variable rate.
• If rates drop during your term, you won’t benefit from the savings.

This type of mortgage is often recommended for first-time buyers or anyone who wants to avoid the risk of rising rates.

Variable-Rate Mortgage

With a variable rate, the interest rate can fluctuate based on the market (often tied to the Bank of Canada policy rate). Your payments may therefore change over time depending on economic conditions.

Advantages:

• The initial rate is often lower than a fixed rate.
• You may save on interest if rates remain stable or decrease.

Disadvantages:

• Your payments may increase if rates rise.
• Less stability: you need a higher risk tolerance.

This type of mortgage suits buyers who are comfortable with market fluctuations and want to maximize purchasing power in the short term.

Closed vs. Open Mortgage

When choosing your mortgage, the lender will also ask whether you prefer a closed or open mortgage. This choice mainly affects repayment flexibility.

Closed Mortgage

• This is the most common option in Quebec.
• Lower interest rate than an open mortgage.
• In return, you’re limited in how much you can prepay (e.g., full payout, accelerated payments).

Good to know: If you sell or refinance before the end of the term, you may have to pay prepayment or break penalties.

Open Mortgage

• Less common, often chosen for short-term mortgages.
• Higher interest rate, but
• You can repay the mortgage at any time without penalty.

When should you choose it? If you plan to sell soon or you’re expecting a lump sum (e.g., inheritance, bonus), an open mortgage can be advantageous.

Mortgage With a Down Payment Below 20%

In Quebec, if you buy a home with less than 20% down, you are required to take out mortgage loan insurance.

What you need to know:

• Insurance is generally provided by CMHC (Canada Mortgage and Housing Corporation) or private insurers (Genworth, Canada Guaranty).
• The cost is added to your mortgage, so you don’t pay it all at once.
• The premium rate varies based on your down payment (the lower it is, the higher the premium).

Specific conditions to meet:

• The property must be owner-occupied (not for rental use).
• The purchase price must be under $1 million.
• Your debt ratios must meet lender thresholds.

This type of mortgage is very common for first-time buyers. It allows you to become a homeowner sooner, even with a modest down payment, as long as your finances are solid.

5 Requirements to Qualify for a Mortgage in Quebec

Before approving a mortgage, financial institutions evaluate several factors to make sure you can repay. Here are the main criteria to meet.

1. A Sufficient Down Payment

The down payment is the money you personally invest in the purchase.

• Minimum 5% for homes under $500,000
• Minimum 10% on the portion between $500,000 and $999,999
• Minimum 20% to avoid mortgage default insurance

The higher your down payment, the better your borrowing conditions.

2. Stable Income and a Strong Debt Ratio

Your income must be enough to cover mortgage payments along with other debts.

Lenders look at two ratios:

• Gross Debt Service (GDS): maximum 32% of your income for housing costs (mortgage + taxes + heating)
• Total Debt Service (TDS): maximum 40% of your income for all debt obligations

If you exceed these thresholds, your application may be declined or limited.

3. A Strong Credit History

Your credit score directly affects how much you can borrow and on what terms.

• Ideally, a score above 680
• No major late payments in recent years
• A stable and diversified credit history

Strong credit = more choices and better rates.

4. Stable Employment

Lenders prefer borrowers with permanent employment or reliable recurring income.

• Employed for at least 3 months (often longer if in a probation period)
• Self-employed borrowers must provide notices of assessment for at least 2 years
• Non-guaranteed income (tips, commissions, etc.) is assessed more strictly

5. A Property Appraisal

The bank wants to ensure the home is worth the amount being borrowed.

• A professional appraisal may be required
• If the purchase price is too high compared to the appraised value, the mortgage amount may be reduced

This step protects both the lender… and you, against a poor investment.

Steps to Get a Mortgage

Ready to buy a home? Here are the main steps to obtain a mortgage in Quebec:

1. Mortgage pre-qualification: Before you start searching, request a pre-qualification from a bank or mortgage broker. This gives you a clear idea of your borrowing capacity.
2. Compare rate offers: Don’t stop at your usual bank. Compare rates, but also conditions: penalties, flexibility, repayment options.
3. Formal application and documents: You’ll need proof of income, bank statements, pay stubs, credit report, and property details.
4. Conditional approval: The lender issues an approval subject to certain checks (e.g., appraisal, insurance).
5. Signing with the notary: Once the mortgage is finalized, everything is made official before a notary at closing.

Tips for Choosing the Right Mortgage

A mortgage isn’t just about the rate. Here are a few tips to make a smart choice:

• Don’t look only at the interest rate. Also review the terms, fees, and flexibility.
• Think about your future. If you may move or want to pay off faster, choose a more flexible mortgage.
• Take the time to compare. A mortgage broker can help you secure better terms than going directly to your bank.
• Ask about penalties. They can be costly if your plans change.

Frequently Asked Questions (FAQ)

What is the minimum down payment to buy a home in Quebec?

The minimum down payment is 5% of the purchase price for a property under $500,000.
For a home priced between $500,000 and $999,999, you must provide 5% on the first $500,000, then 10% on the remaining portion.
At $1 million and above, a 20% down payment is mandatory.

Which mortgage rate type should I choose?

The choice between a fixed and variable rate depends on your profile.

• If you want stability and predictability, choose a fixed rate.
• If you’re comfortable with a bit more risk to potentially pay less interest, a variable rate can be beneficial.

Is a fixed rate better than a variable rate?

There’s no single right answer.
A fixed rate is more reassuring, especially if you have a tight budget.
A variable rate is often lower at first, but it can increase if rates rise.
The ideal choice depends on your risk tolerance and your medium-term plans.

How much can I borrow based on my income?

That depends on your income, your debts, and the price of the property you’re targeting.
In general, lenders follow two ratios:

• Maximum 32% of your income for housing costs
• Maximum 40% for all of your debts (car loan, credit cards, etc.)

A pre-qualification with a lender will give you a more precise estimate.

Can I pay off my mortgage faster?

Yes, but it depends on the type of mortgage you choose.

• An open mortgage allows you to repay anytime without penalty.
• A closed mortgage limits extra payments, though some contracts still allow prepayments of 10% to 15% per year.

Always review the clauses before signing.

Conclusion

Choosing the right mortgage is a key step in the home-buying process. By understanding the mortgage types available, the requirements to qualify, and the options in front of you, you’ll be better prepared to make an informed decision… and avoid unpleasant surprises.

Whether this is your first purchase or you’re looking to invest again, I’m here to support you at every step, from financing to getting the keys.

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