7 Questions to Ask Before Choosing a Mortgage

The advertised rate is the easiest number to compare between mortgages, and the least complete one. These are the questions that actually determine what a mortgage costs you over time.

Shopping for a mortgage by rate alone is a bit like buying a car by looking only at the sticker price. It's an important number, but it's not the whole picture. Here's what else is worth asking before you commit.

1. Is this rate fixed or variable, and what does that mean for me right now?

Fixed rates stay the same for your term. Variable rates move with the lender's prime rate, which can work in your favour or against you depending on where rates are headed. Neither is universally "better" — it depends on your risk tolerance and how long you plan to hold the mortgage.

2. What's the term length, and does it match my plans?

A term (often 1-5 years) is different from your amortization (the total time to pay off the mortgage). Ask whether the term fits your plans — if you might sell, refinance, or move within a few years, a shorter term may make more sense than locking into five.

3. What are the prepayment privileges?

Most mortgages let you pay extra without penalty, up to a limit — often 10-20% of the original principal per year. If becoming mortgage-free faster matters to you, this number matters a lot more than a slightly lower rate with no flexibility.

4. What's the penalty for breaking the mortgage early?

Life changes. Job relocations, sales, and refinances happen. Penalty structures vary significantly between lenders and between fixed and variable rates — this is one of the most overlooked numbers until someone needs to break their mortgage and finds out the hard way.

5. Is the mortgage portable?

If you sell and buy again before your term is up, portability lets you carry your existing rate and terms to the new property instead of breaking the mortgage and paying a penalty.

6. How does this lender handle renewal?

Not all lenders treat renewals the same way. Some send a generic renewal letter with their posted rate; others are more competitive. It's worth understanding how a lender has historically treated renewing clients, not just new ones.

7. Am I only seeing one lender's options, or a real comparison?

This is the question that changes everything else. A single bank can only offer you their own products. An independent brokerage with access to multiple lenders can compare rate, terms, penalties, and flexibility across dozens of options to find the actual best fit for your situation — not just the best fit among what one institution happens to offer.

Frequently asked questions

Is a lower rate always the better deal?

Not necessarily. A slightly higher rate with better prepayment privileges, a lower penalty, or portability can save you more over time than a marginally lower rate with rigid terms.

Should I go with my bank or a broker?

A bank can only offer their own products. A broker compares across many lenders, which often surfaces options — and better terms — a single bank wouldn't offer.

How do I know which questions matter most for me?

It depends on your plans. Someone planning to stay 10+ years cares about different things than someone who might sell in two. That's exactly what the initial conversation with a broker is for.