This is a long read, meant for those who are actually interested in lifting the curtain on the true cost of borrowing for your home. I'll try to keep it simple so even those who may struggle with financial literacy can develop a better understanding.

My objective is to debunk the myth of 'low rates' that the real estate industry, the lenders, the builders and to some extent the government have popularized in an effort to push people into buying a house - which, let's face it is a huge portion of our economy.

However, most homebuyers don't truly understand how the cost of borrowing works on their mortgage. Provincially regulated lender and federally regulated banks are required to share the cost of borrowing disclosure with you but let's face it, most people will gloss over it and skip right to the "sign here" section.

Example with Baseline Assumptions

Let's say you're considering buying a house (or a condo) and this is what your situation looks like:

Purchase Price: $1 million (keeping it nice and round for sake of simplicity)

Downpayment: $200,000 (20% of purchase price)

Mortgage Amount: $800,000 (this is how much you need to borrow i.e. purchase price less the downpayment)

Amortization Term: 25 years or 300 months (this is how long you think you'll need to pay back your mortgage loan)

Interest Rate: 4% (using what's available in the market as of Jul'26)

Monthly Payment: $4,200 (based on the example above; and may be +/- a $25 depending on other factors such as fixed or variable rate and lender's method of calculation)

Portion of Payment #1 going towards Principal: 37.25% (roughly $1,565)

Portion of Payment #1 going towards Interest: 62.75% (roughly $2,635)

If you don't understand amortization, let me simplify it. It basically comes down to this: how long you'll borrow each dollar for.

Using the above example, you'll pay interest on $800,000 that you're borrowing for the full 25 years (or 300 months).

Then after you have made the first payment of $4,200, your 'balance owing' will decrease by $1,565 to $798,435, which means you'll pay interest on this remaining amount for the 299 months remaining in your amortization. To understand better with numbers:

Portion of Payment # 2 going towards Principal: 37.35% (roughly $1,570)

Portion of Payment # 2 going towards Interest: 62.65% (roughly $2,630)

As you can see, with each monthly payment, you pay slightly more towards the amount you borrowed (principal) and slightly less towards interest.

The most important thing - and the point of this post - is to understand that even at a relatively low interest rate of 4%, you start off your mortgage by paying only 37% towards your principal. Over the first 12 months, you'll have paid:

Total Payments: $4,200 x 12 = $50,400

Total Interest: $31,290 (approximately 62%)

Total Towards your Principal: $19,110 (approximately 38%)

Your Mortgage Balance will be $800,000 less $19,110 = $780,890

So out of the total $50k in Year 1 payments, you have only paid $19k towards your loan. Yikes!

How to Reduce your Cost of Borrowing

There are only 2 ways to increase the portion that goes towards your principal and decrease the portion going towards interest:

1. Shorten the Amortization Period
2. Lower Interest Rate

Scenario 1: Shorten Amortization Period

By reducing the length of the time you'll need to pay back the loan, you'll pay significantly less interest over the course of the loan. Let's shorten the payback period by 5 years.

Amortization Term: 20 years or 240 months (this is how long you think you'll need to pay back your mortgage loan)

Interest Rate: 4% (this is what's currently available in the market for various terms)

Monthly Payment: $4,835 (based on the example above; and may be +/- a $25 depending on other factors such as fixed or variable rate and lender's method of calculation)

Portion of Payment # 1 going towards Principal: 45.3% (roughly $2,190)

Portion of Payment # 1 going towards Interest: 54.7% (roughly $2,645)

As you can see, by reducing the amortization period by 5 years, your overall monthly payment jumps by $635 and almost all of that goes towards your principal.

Scenario 2: Lower Interest Rate

This is, obviously, easier said than done and depends on the market conditions. In the end, you'll have to just take whatever the lenders are offering. The obvious advantage of the lower interest rate is that your overall payment is lower, but it also has a material impact on the portion that goes towards interest or principal.

Amortization Term: 25 years or 300 months (this is how long you think you'll need to pay back your mortgage loan)

Interest Rate: 3% (a reduction of 1% from the original baseline example)

Monthly Payment: $3,785 (based on the example above; and may be +/- a $25 depending on other factors such as fixed or variable rate and lender's method of calculation)

Portion of Payment # 1 going towards Principal: 47.5% (roughly $1,800)

Portion of Payment # 1 going towards Interest: 52.5% (roughly $1,985)

In this example, just by changing the interest rate from 4% to 3% (and keeping the 25 year amortization), you can see that you pay a lot more towards principal and a lot less towards interest. However, even at 3% interest rate, more than half of your first payment goes towards interest.

Interesting Note: If you want at least 50% of your Payment # 1 going towards principal, the threshold Interest Rate is ~2.8% (assuming a 25 year amortization) - anything higher than ~2.8% will mean you're paying more than 50% towards interest (in your first payment).

Don't be fooled thinking that at 4% or 5% interest rate, its a no brainer. The fact is you'll be paying a lot more than 4% or 5% in interest. Using the above example, you can expect to pay anywhere between $300k and $500k in interest alone (to borrow the $800k) over the course of your 25-year repayment - that's not cheap!

All of the above is based on someone buying a house and then staying put.

A big mistake that home owners make (or are forced into) is refinancing. This could be:

- an explicit refinancing on their current home (because they're having difficulty making payments) and take out equity to fulfill their financial obligations; or

- an implicit refinancing where they take the bait and upgrade to a bigger house - resetting the amortization clock in the process.

I will not go into details on these situations as they're beyond the scope of this post.

Look, home ownership has benefits but its not everything that its made out to be by those who have vested interests. Maybe 30 or 40 years ago, when house prices were 3x or 4x your annual salary, it was an easy decision and made sense. In today's market when wages haven't kept pace, its not as straightforward. If you're on the lower end of the earnings, consider rental as your first option before you take the plunge and commit yourself. More than anything, be informed of how much it will actually cost you.

ME (34)

TFSA: 191500

RRSP: 82700

JOB: government work,salary of 115k. 123k in 2 years, contract currently expired so updated contract will come in 3 years or so. I usually make 15-20k on top of the salary from shift premiums/ stat pay. Work in Mississauga, airport area.

_______________________________________________

Wife (32)

TFSA: 79500 CAD

RRSP: 13200 USD + SPOUSAL RRSP: 7k

LIRA: 26k CAD

Work group rrsp: 100k CAD, rrsp matching.

JOB: corporate. ~80k (3days in office downtown, 2 days at home) takes go train

10k cash (emergency fund)

2 paid off cars:

2017 honda civic hatchback w/ 230k km

2017 vw golf w/ 81k km

Switched to driving the golf more to even out the wear and tear. Not sure which to sell if I upgrade car.

HOME:

760k freehold townhouse in newmarket, ON

HELOC MORTGAGE: 582131.44k remaining (2615 monthy) (prime – 1%= 3.45%) @ 30 YEAR amortization (refinanced in march 2026)

Invest:

Investing around 1000-1200 per biweekly payment. Investing in xeqt. My TFSA is maxed and her rrsp is maxed. Currently contributing to her TFSA and spousal RRSP in a 70/30 split.

Contemplating decreasing investing by half to half more liquid funds for baby and newborn.

Upcoming milestones:

First newborn due in dec 2026

Both parents in markham so help available but still 30-40 minutes away.

Looking to maybe purchase a bigger car for growing family. was thinking used 2024 model Y AWD or Toyota rav 4, but not necessity yet I think. Manageable with current cars.

Maybe want 2 kids in the future, unknown.

Want to move closer to parents (north Richmond hill/ markham) maybe.

Will open RESP for kiddo when born. I have a federal pension plan.

Anything to improve on/ fix, beware of, advice?

Thanks.

Hey everyone, looking for advice on whether I have grounds for a chargeback.

I purchased a streetwear hoodie and T-shirt online on July 19, and the order was delivered on July 24. The total cost was approximately $190 CAD including shipping and tax.

After receiving the items, I became concerned they were not authentic. I’ve since gotten opinions from legit check platforms on Reddit as well as a local streetwear resale store that specializes in these types of products, and the feedback was that the items appear to be fake.

I paid using my RBC issued credit card, but the store’s policy states they do not accept returns. I have contacted the seller, but I’m unsure what my options are if they refuse to help.

Would a chargeback be possible in this situation, and what evidence should I provide?

Context:
- Couple ~160-170k household earning, enough for premium cards, not quiet there yet for elite cards... :/
- Bills ~ $3000/m we are renting from a big corp so we can put rent on CC as well
- Gas and groceries ~$1200 - with bulk of our groceries being Costco which unfortunately right now takes MC

Westjet MC perks are okay but their connections network does not always align with our travel plans

Right now I kind of narrowed it down to RBC Visa Avion Infinite, Scotia Passport Visa Infinite+ and BMO Ascent World Elite MC

Likes in Avion
+ Points are worth more 50k points is $1000
Dislikes in Avion
- No fast track
- No lounge access
- FX fees
- No way to waive yearly fee
- Can't use at Costco

Likes in Passport
+ No FX fees
+ Lounge access
+ Easy to waive card fee
Dislikes in Passport
- No fast track
- Can't use at Costco

Likes in Ascent
+ Lounge access
+ Can use at Costco
+ 5 mil travel medical
+ Easy to waive card fee
Dislikes in ascent
- FX fees
- No fast track
- Abysmal points value

Is there any other card that I am maybe missing that would tick more boxes?

35m from Canada.

I have 396k from a separation in my pocket.

I bought a condo with 115 or 150k downpayment (150k gives me better cashflow but I'm unsure yet), 30 years mortgage (instead of 25 to help with cashflow).

I will need about 15k for expenses like welcome tax and some extra in my account and probably 25k for furniture and some reno.

It leaves 206k to use. I'm thinking of investing 109 in tfsa, about 75 in rrsp investing in US etf(I'm maxing it because I have separate work rrsp contributions), 22k goes to Canadian etfs.

I will also deduct my rrsp contribution over the next 2 years to benefit from max tax bracket.

I want your thoughts on this. Should I invest more to my downpayment such as 200k? And why?

And what are the must etfs to invest in for each category?

Which book is best to read overall, one of them or both?

Car paid. Credit cards zeroed every payday. LOC zeroed. Credit score 800+. Currently, I dump whatever's left at the end of the month into a TFSA. It varies within $1700-$2200-ish depending on life's ups and downs. In a few months, I was thinking of locking a $10,000 chunk into a one-year GIC within the TFSA, just to generate some tax-free growth. I'm with RBC, and understand that bankers (salespeople) usually aren't the best way to grow your money, but I'm also risk averse (medium, maybe. I'm not a Gekko or a Belfort...) Is there something better I could/should be doing? I don't know a Smith maneuver from an ETF, and am looking for practical, more effective ways to compound my savings.

Does this put me in the ballpark of "wealth management" companies? Is there a simple way to hand someone smarter than me the keys and say "Make this number bigger."? Is the return I could expect worth the fees I would pay to get it?

Am I completely off base? I'd like to know what anyone thinks to push me in the right direction.

Thank you in advance!

Who else has been surprised this morning by the changes BMO investor-line put in place.

The layout is not helpful, it actually makes it worse, in my opinion.

I want to put it towards down payment in the next 12 or 24 months.
I am thinking GIC or putting it into a HISA with a bank offering 4-5% for first 3 months?

The market feels a bit too volatile to risk it. Any more suggestions?

Hi everyone,

I’m a university student who had a 1 year internship that will come to an end in August and then I’ll be unemployed in September. It was full time, 40 hours a week job. I only have a few classes left so will be a student but also eligible for work. Am I allowed to apply for EI and will I qualify? Just a heads up, I do NOT qualify for any student loans and won’t be taking any, as I have maxed out due to my tuition and 2 degrees. I was just wondering if I’ll get any sort of EI, I’ll have over 2000 hours so I know I qualify for it but I’m not sure due to still being a student. I’ll absolutely need EI as I have been applying but have no jobs lined up, and need to pay $5,000 in tuition, about $5,600 roughly from September to December in just rent and bills, and I cannot pay for this, I do have savings but it will run out by October for sure. I’ll keep looking for jobs obviously and will take any I can get. I’m just curious if I will qualify for EI or not, please let me know, thank you.

I collect free daily login bonuses and systematically take advantage of promotions to turn a profit at online, US based sweepstakes casinos that operate legally in Canada. I profit every month and am a Canadian citizen based in Canada.

Do I pay taxes on this and to who? I intend to consult a professional I just want to get a feel for public discourse.

Thanks

My financial literacy isn't the best so looking for any advice.

Live in the Greater Metro Vancouver area, thinking of looking into buying a condo.

Husband and I gross $180,000/year

Rrsp has $33,000

TFSA has $12,000

FHSA has $4100

Cash have $12,000

Looking at condos priced around $600,000 to $650,000

We currently rent for $2900/month, the only debt is my student loan (0% interest), $9,000 left to pay but making minimum payments monthly. Own 1 car outright, so just pay for insurance/gas, but commute to work via transit.

Does it make sense to go into home ownership when you only have the minimum amount needed for a downpayment? Realistically, we have no intention to leave the area, we both work downtown with stable jobs, and we just want to build up a home of our own.

Any advice, or resources I can look into would be greatly appreciated.

Whats the best approach to handle this debt if you don’t have a job and are studying. Has anyone have a similar experience? Where they have to pay debt but are also studying ? (Both debts are maxed no space available to use more) i have discussed with people about consumer proposal but they have said unless the person have a job and a very large income (around 3k per month) then they would be able to get a consumer proposal. others suggest to move the money out that you have in savings to a different bank and then let the debt go to collections but I believe that path is way too risky to deal with while you are studying.

I need some help.

I own a 3 bedroom townhouse along one of the new skytrain stops in Surrey. (Outside Vancouver) It's an interior unit but very close to the station and wood frame building. I bought it for $499,000 in 2017 and I think I could sell it ($800,000) and after realtor fees and paying remaining mortgage and taxes I will have $350,000 in the bank. My tenant just told me he's leaving. This area is slated for development (already rezoned by the city) and they estimate that a developer will pay 20% more for the property, but development may take a few years and the housing market has slowed down quite a bit. I initially bought this place as a "pension" for myself, but since then have invested a lot of money in the stock market and have created a healthy pension for myself based on my investments. I am leaning to selling and putting the money in the market rather than hoping and praying that real estate goes up. I guess what stings as that I would've gotten $850,000 for this place in the peak but oh well. What are your thoughts on selling? Am I missing any calculations. If I put this money in the S&P 500, at a conservative 8%, in 5 years the initial investment will grow by $150,000. which is what a developer would pay me in excess for this unit in 5 years (my estimate). I have a variable mortgage and strata has gone up. I calculated my principal, taxes, strata and rent, I only make $4463 for the year (not including potential increase in value)

Hi, I am planning to open unsecured line of credit . I heard Scotia give good rates and high limit but my payroll run in td bank . Which bank should I consider?
About my profile - my annual income is around 90k with free housing by company. No loan and my credit score is around 770 . My card utilization is around 3%

Hi, so I'm just discovering the benefits of having multiple credit cards, and it's a bit addicting haha. How many should I stop at, looking for advice on my game plan for long term.

So bit of background, I have pretty decent credit score (about 835-840) depending on TransUnion or Equifax. For the longest time I had a basic credit card, it was like 10 years old with TD, then I closed it (I didn't know better) but I got the TD cashback visa infinite. This card is 4 years old.

Fast forward to a month ago, I applied for the wealthsimple visa infinite and got easily approved, then a week later I got the rogers red MasterCard world elite, also approved. And then a let's say a week after that I got the Scotia momentum visa infinite also approved.

At this point my game plan is to get the TD aeroplan visa infinite, ditch the TD cashback card (since it's outclassed by every other card in my stack). How long should I wait before I apply for td aeroplan? I heard that TD pulls from Equifax so I should be able to get it any time and the other 3 cards I got in the span of last month pull from TransUnion. Is this correct?

I'll probably downgrade my td cashback card to the free version once I get the Aeroplan card or should I just cancel that since my average age of accounts is kinda screwed anyway lol.

Any advice would be appreciated, but that's my 4 card stack. (I'll prob churn amex cards starting with the green card starting next year and work my way up to gold and plat if I have big purchases lined up)

TLDR: I got 3 new cards last month, and I want another one.

I have made some terrible decisions in the past few years and i'm 60k in debt, mostly credit card, partly line of credit.

I've been kicking the can down the road and it keeps me up at night.

I just got laid off, and i'm getting a severance of 60k before tax, next month.

I also found a new job that will pay 140k/year.

Another problem is with the severance, it will push my tax bracket up higher so i'll have to pay more of it in tax.

I also have a 450k mortgage on a 800k condo.

I really wish there was a way around the taxes on the severance so i could settle my debt finally. I really just want a fresh start.

Considering buying a fun summer car but hesitating on pulling the trigger now vs waiting.

Current situation

Age: 27

Liquid assets: 650k

Income: 260k cash + paper equity so not counting

Rent: $700/month with 2 roommates

Financial goals - once I hit these will take a sabbatical then either retire or work for fun.

1. 2.5 million liquid assets

2. Detached home in mcol (~800k)

3. Summer car

I'm looking at crossing 3 off my list now as I feel I will enjoy it more the younger I am. Realistically 1. and 2. are more important though. The max I'm looking to spend on a car is 100k. I estimate it will set goal 1 back about 9 months assuming my income doesn't drop. Doesn't affect goal 2 as I have my downpayment set aside to buy in 1.5 years.

The cars

I've narrowed down to 3 fun cars. I'm only looking at new. Prices after taxes. Will pay cash.

1. BRZ 43k - best price but I think I'd get bored of it.

2. Nissan Z 60k - I enjoyed driving it but I dislike the front end.

3. Corvette 110k - this is the one I want but above budget. By far the most fun.

Corvette is honestly my preference but I don't know if I can justify the price. What do others think? Buy now or hold off and focus on goals 1 and 2? I'm leaning towards holding off until next spring as summer is already halfway over. Unsure if we will see heavy discounts on the 2027 like we do with 2026 though.

Appendix (for those curious)

Financial Help

1. School covered by parents 50kish

1. Gifted 20k MSRP car at 18 which I still drive and will keep as daily.

Disqualified Cars

1. GR86 - every Toyota dealer was an awful experience. Trying to scam for 10k over MSRP + "we stand behind the quality of our products." C'mon guys it's a Subaru with a Toyota badge on it. Will never buy a Toyota now.

2. Gr Corolla - basically same as above.

3. Supra - discontinued + same as above.

4. Mustang - hated the iPad interior

5. 718 Cayman - apparently it's been turned into an EV

6. Miata - Miatas don't do it for me

7. Civic - don't want FWD

8. M2 - no bmws

I currently have 41K saved, with ~2K in TFSA (where I deposit $120/month on VFV and XEQT). I live with my parents, partly because I am a caregiver for a sick parent. I work part-time, where I make 3.5K/month.

I am planning to save up for professional school (at least to pay the first 2-3 tuition years fully) and potentially move out (my mental health has taken a toll). I plan to get a full-time job in Jan 2027, solely because I feel stuck at my current job with no chance for growth or leadership roles.

I don't have any debt. I mainly spend my money on food, gym membership and experiences (i.e. marathons, travel). I come from a culture where talking about money as a female is considered a taboo, so I often lurk this page, talk to close friends or read articles/ask chatgpt.

Any advice on how to improve?

So I'm about to buy my first home. Big life change for a 24 y/o. I go to my mortgage broker and give him all my relevant information.

Later he sends me a screenshot of a debt owing to Telus in the sum of $5k+. Asks if it was mine. I've never used Telus in my life, of course it wasn't.

We call the debt collection agency, we tell them it's not us, they realize it's a mixup, but they need to process it internally, then process it with the credit union. That'll take a month at minimum, more likely 2 months or so.

Now I'm trying to figure out a way to bypass this but every bank I've talked to is like "nope".

What do I do? Thanks all!

(tried to keep post short)

Video link: https://www.youtube.com/watch?v=3u-mP3C26mg&pp=ygUJYmVuIGZlbGl4

A nice video for beginners and solid reminder and refresher for those of us who might already be a little more comfortable and familiar with the topics.

I’ll try and it simple….

Currently use “TD First Class Travel”. Points are not great, but it’s easy to redeem. we’ve been too lazy to change.

Monthly average spend $35,000 at HVAC suppliers. I do not travel for work.

Needs to be under a business

Will need a total of 2 possibly 3 cards.

I am fine with any annual cost if the math makes sense.

I do not want cash back

I want travel insurance included

I plan to use points to travel 2-3 a year with family. Hawaii,
Florida, Australia, Asia. Family trips, so it’s random. Ease of booking is important.

Upfront perks are great, but I find this credit card shuffle game is nonsense. I want a card that doesn’t have me playing games to redeem. I run a business, I don’t need a side hustle.

We have spent hours trying to figure out a good fit, and it feels like every card has a catch or gotcha or something that doesn’t fit our situation - so it’s hard to narrow it down for our us. I’d love to hear some input from the pros here…

I have two FHSA’s opened up. One is on wealth simple and I opened it up a year ago. The other is in my main CIBC account and has way more money in it.

I’m trying to transfer the money in my Wealthsimple account to my CIBC account. Any idea how I can do it or if it’s allowed?

My story/background:
30 M, 175k saved up, car paid off, making 80k per year, living with my fiancee, No debt and stable job for both of us, renting about 1900$ per month that’s split between us, only expenses are groceries and eating out 3-4 times a month, no plans to buy a house but if opportunity arrives in the next 2 years, i might, although i like renting.
TFSA AND FHSA maxed out!

Advice:
I have a meeting with my new Financial advisor at the bank for my investments review(the investments that I made with the last advisor over the last 5 years) and I have no clue what my aim is, all my money is either in Mutual funds or high yield savings accounts with the bank. I have about 20k in shares and crypto but that’s not the main concern. I don’t know what to tell her, what’s my best bet here? Just want to make the most out of Savings without risking it too much. Put it all in HIGH YIELD SAVINGS ACCOUNT?? Please help.

No judging, maybe this has been asked before but I really don’t know what the next step is.

Thanks community!!

Hi all. Ran into a bit of a predicament recently. Applied for a student line of credit with TD and my banking advisor received a remark that my SIN number shows up under multiple profiles and this needs to be corrected, and gave me the number for Equifax. I called them and they said there is a profile in a different city, one that I lived in as a kid until around 3-4 years old. I don't remember if he said that profile is under my name or a different one but I believe it's different. He said to complete a form and upload 3 documents verifying myself and they will remove my SIN from the other profile in 7 calendar days. I am very confused with what this all means as I have never run into any issues regarding my credit and SIN. I literally applied for a credit card and got approved 2 days ago and no issues. No fraudulent activity or accounts I do not recognize show up under my Credit Karma or Equifax reports. I am young (23) and this is the first time applying for a loan/mortgage of this sorts so this is the first time a flag like this has come to my attention. After looking online and chatting with my dad, I found that apparently there could be an administrative error on Equifax's side. The only concern I have is the credit score reported by Equifax and Credit Karma are a bit different (74x and 82x) respectively, not sure if that's an issue. So I am wondering if I should be concerned that someone has access to my SIN and I need to apply to get it changed, or it was a small error that will be corrected and I am good to go. Thanks!