Quiz: Do You Know the Mortgage and Real Estate Rules?

Q: Are the HBP and FHSA useful for a down payment?

Yes: the Home Buyers' Plan (HBP) lets you withdraw up to $60,000 from your RRSP tax-free for a first home (repayable over 15 years), and the FHSA lets you save up to $40,000 lifetime, completely tax-free, for the same goal.

Q: Is a variable rate always riskier than a fixed rate?

A variable rate carries more uncertainty about the future payment amount, but it isn't necessarily "worse" — historically it has often cost less on average, at the price of greater variability.

Q: Does the stress test apply to all buyers?

Yes, it generally applies to all new mortgages in Canada, insured or not, regardless of down payment size.

Question 1

When is mortgage default insurance (CMHC or equivalent) mandatory?

Accepted Answer

When the down payment is less than 20% of the property's value

Answer

Always, regardless of down payment

Answer

Only for a first-time purchase

Answer

Never in Quebec

Question 2

What's the minimum down payment generally required for the first price bracket of a property in Canada?

Accepted Answer

5%

Answer

0%

Answer

10%

Answer

25%

Question 3

What's the difference between a mortgage's amortization and its term?

Accepted Answer

Amortization is the total theoretical time to pay it off in full (e.g. 25 years); the term is the length of the current contract/rate (e.g. 5 years), renewable

Answer

They're two words for the same thing

Answer

The term is always longer than the amortization

Answer

Amortization only applies to variable-rate loans

Question 4

A fixed mortgage rate means that...

Accepted Answer

The rate stays the same for the entire chosen term

Answer

The rate changes every month with the market

Answer

The rate is always lower than a variable rate

Answer

The rate only applies to CMHC-insured mortgages

Question 5

Is the capital gain realized on the sale of your principal residence taxable in Canada?

Accepted Answer

No, thanks to the principal residence exemption (under conditions)

Answer

Yes, like any other asset

Answer

Yes, but only at 50%

Answer

No, but only in Quebec

Question 6

Is a rental property (not your principal residence) treated the same way for tax purposes at sale?

Accepted Answer

No, the capital gain on a rental property is generally taxable (at 50% inclusion)

Answer

Yes, it also qualifies for the principal residence exemption

Answer

No, it's fully tax-exempt

Answer

Yes, but only if it has more than 4 units

Question 7

What is the mortgage "stress test" in Canada?

Accepted Answer

The requirement to qualify at a higher mortgage rate than your actual contract rate, to check your ability to absorb a rate increase

Answer

A structural soundness test for the house

Answer

A test required only for CMHC-insured mortgages

Answer

A test that no longer exists since 2020

Quiz: Do You Know the Mortgage and Real Estate Rules?

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