Mortgage Financing in a Competitive Housing Market

Champion • February 25, 2021

Canada is an interesting place to buy a property right now. If you’ve paid attention to the media at all over the last few weeks, you’ve probably heard that…

  • Many people are still out of work due to COVID-19.
  • The bank of Canada has forecasted rates will stay low for a long time.
  • Although house prices keep rising, we may be in for a housing crash sooner than later.

While more recently, the media is reporting that…

  • Canadian house prices are hitting record highs with no stop in sight.
  • There is very little inventory available in housing markets across Canada.
  • This week, bond rates have started to rise, and we can likely expect lenders to follow with an increase in fixed rates.

Needless to say, things can change pretty quickly. And while talking about the “Canadian housing market” is a lot like talking about the “weather in Canada”; it varies regionally and will be significantly different depending on where you live, one thing seems to be true, if you’re looking to buy a property, you can expect a competitive housing market.


Some markets will be hotter than others, but buying a home in a competitive housing market can be difficult.


You know you’re in a hot housing market when…

  • Properties sell within days of listing on MLS.
  • Properties are selling at or above the asking price.
  • Properties are selling with competing offers.
  • Properties are selling with competing offers well over the asking price.

Unfortunately, this can make you feel…

  • Rushed to make decisions out of your comfort zone.
  • Like you are being priced out of the market.
  • Like you won’t ever find a property.
  • Like you may need to change up your strategy to prevent being outbid by competing offers.

Now, if you get to this point in your home buying journey, you might begin to feel desperate. Understandably so. You might even look for ways to get your offer accepted and consider taking risks you wouldn't otherwise take. You may even consider (or be encouraged to) submit a subject-free offer.


While writing a subject-free offer might seem like a good solution to get your offer accepted, you need to know that it comes with significant risk. The biggest risk you take is that your deposit could be forfeit if you write an unconditional offer and your financing is declined.


The only time a subject-free offer is without risk is when you have enough money to purchase the property with the cash you have in the bank. So if you don’t have the cash to buy the house outright, the smart move is to mitigate your risk by including a “subject to financing” clause in the offer to purchase.


Mortgage financing is never guaranteed. The reason mortgage financing isn’t guaranteed is that securing mortgage financing is not only dependent on you the applicant, but also on the condition and value of the property. So even if you have the most stable income, an incredible credit history, and a large downpayment, if you need a mortgage, all lenders will assess the property’s condition and value before agreeing to mortgage financing.


Their scrutiny of the property is the same regardless of whether you include a subject to financing clause or make your offer unconditional.


Unfortunately, if you’re in a competitive situation, this is where you have to make quick decisions and put your best offer forward, but this is also when you’re at the highest risk of making mistakes. There are many reasons a lender can decline your mortgage application; here are just a few of them.

  • The property doesn’t appraise for what you offer, forcing you to come up with considerably more for a downpayment. This is especially true in competitive situations.
  • The MLS listing contains compromising information.
  • The property was a former grow op or drug lab.
  • The property has a special assessment pending.
  • The condo insurance docs aren’t acceptable to the lender.
  • The property doesn’t meet zoning or size requirements.
  • The lender finds out there is asbestos, aluminum or knob and tube wiring, or an underground oil tank.
  • Or anything else they deem too risky to lend money.

So what can you do? Well, the best place to start is to make sure you have all your ducks in a row. Here are things to consider.

  • Do you have a mortgage preapproval in place?
  • Do you have all the supporting documents submitted to your mortgage professional
  • Are you working with a mortgage professional who has outlined the process, including how long they need to arrange financing?
  • Do you have rock-solid personal guidelines for making an offer? This will help you to avoid making an emotional last-minute decision.
  • Are you working with a real estate professional who is willing to help you stick to those personal guidelines?

Securing mortgage financing in a competitive housing market is tough. So if you find yourself without a concrete plan, please contact me anytime. I deal with high-stress situations like this regularly, and I would love to provide you with the counsel you need. 


SHARE THIS ARTICLE

RECENT POSTS

Smart Steps to Get Your Home Market-Ready

By Champion • September 10, 2025
Thinking About Selling Your Home? Start With These 3 Key Questions Selling your home is a major move—emotionally, financially, and logistically. Whether you're upsizing, downsizing, relocating, or just ready for a change, there are a few essential questions you should have answers to before you list that "For Sale" sign. 1. How Will I Get My Home Sale-Ready? Before your property hits the market, you’ll want to make sure it puts its best foot forward. That starts with understanding its current market value—and ends with a plan to maximize its appeal. A real estate professional can walk you through what similar homes in your area have sold for and help tailor a prep plan that aligns with current market conditions. Here are some things you might want to consider: Decluttering and removing personal items Minor touch-ups or repairs Fresh paint inside (and maybe outside too) Updated lighting or fixtures Professional staging Landscaping or exterior cleanup High-quality photos and possibly a virtual tour These aren’t must-dos, but smart investments here can often translate to a higher sale price and faster sale. 2. What Will It Actually Cost to Sell? It’s easy to look at the selling price and subtract your mortgage balance—but the real math is more nuanced. Here's a breakdown of the typical costs involved in selling a home: Real estate agent commissions (plus GST/HST) Legal fees Mortgage discharge fees (and possibly a penalty) Utility and property tax adjustments Moving expenses and/or storage costs That mortgage penalty can be especially tricky—it can sometimes be thousands of dollars, depending on your lender and how much time is left in your term. Not sure what it might cost you? I can help you estimate it. 3. What’s My Plan After the Sale? Knowing your next step is just as important as selling your current home. If you're buying again, don’t assume you’ll automatically qualify for a new mortgage just because you’ve had one before. Lending rules change, and so might your financial situation. Before you sell, talk to a mortgage professional to find out what you’re pre-approved for and what options are available. If you're planning to rent or relocate temporarily, think about timelines, storage, and transition costs. Clarity and preparation go a long way. The best way to reduce stress and make confident decisions is to work with professionals you trust—and ask all the questions you need. If you’re thinking about selling and want help mapping out your next steps, I’d be happy to chat anytime. Let’s make a smart plan, together.

How Payment Frequency Impacts Mortgage Financing

By Champion • September 3, 2025
You’ve most likely heard that there are two certainties in life; death and taxes. Well, as it relates to your mortgage, the single certainty is that you will pay back what you borrow, plus interest. With that said, the frequency of how often you make payments to the lender is somewhat up to you! The following looks at the different types of payment frequencies and how they impact your mortgage. Here are the six payment frequency types Monthly payments – 12 payments per year Semi-Monthly payments – 24 payments per year Bi-weekly payments – 26 payments per year Weekly payments – 52 payments per year Accelerated bi-weekly payments – 26 payments per year Accelerated weekly payments – 52 payments per year Options one through four are straightforward and designed to match your payment frequency with your employer. So if you get paid monthly, it makes sense to arrange your mortgage payments to come out a few days after payday. If you get paid every second Friday, it might make sense to have your mortgage payments match your payday. However, options five and six have that word accelerated before the payment frequency. Accelerated bi-weekly and accelerated weekly payments accelerate how fast you pay down your mortgage. Choosing the accelerated option allows you to lower your overall cost of borrowing on autopilot. Here’s how it works. With the accelerated bi-weekly payment frequency, you make 26 payments in the year. Instead of dividing the total annual payment by 26 payments, you divide the total yearly payment by 24 payments as if you set the payments as semi-monthly. Then you make 26 payments on the bi-weekly frequency at the higher amount. So let’s use a $1000 payment as the example: Monthly payments formula: $1000/1 with 12 payments per year. A payment of $1000 is made once per month for a total of $12,000 paid per year. Semi-monthly formula: $1000/2 with 24 payments per year. A payment of $500 is paid twice per month for a total of $12,000 paid per year. Bi-weekly formula: $1000 x 12 / 26 with 26 payments per year. A payment of $461.54 is made every second week for a total of $12,000 paid per year. Accelerated bi-weekly formula: $1000/2 with 26 payments per year. A payment of $500 is made every second week for a total of $13,000 paid per year. You see, by making the accelerated bi-weekly payments, it’s like you end up making two extra payments each year. By making a higher payment amount, you reduce your mortgage principal, which saves interest on the entire life of your mortgage. The payments for accelerated weekly payments work the same way. It’s just that you’d be making 52 payments a year instead of 26. By choosing an accelerated option for your payment frequency, you lower the overall cost of borrowing by making small extra payments as part of your regular payment schedule. Now, exactly how much you’ll save over the life of your mortgage is hard to nail down. Calculations are hard to do because of the many variables; mortgages come with different amortization periods and terms with varying interest rates along the way. However, an accelerated bi-weekly payment schedule could reduce your amortization by up to three years if maintained throughout the life of your mortgage. If you’d like to look at some of the numbers as they relate to you and your mortgage, please don’t hesitate to connect anytime; it would be a pleasure to work with you.

Our Monthly Newsletter Can Save You Thousands

Contact Us