Once you have the basic idea of what a mortgage is, you can start to explore the different options available to you and choose the best type for your needs. Remember that there are several areas that will affect your ability to gain certain mortgages, but for right now we will leave those details up to your Canadian mortgage broker; Toronto has several of these who are eager to help you get into that condo of your dreams.
What we will explore here is one specific type of loan, the conventional mortgage. As you might expect from the name, these mortgages were the most widely granted up until a few years ago (and given factors that we will see in a bit are likely the way of the future, as well).
Read Nerd Wallet's definition of a conventional mortgage.
Conventional mortgages are loans granted to people who buy a house, where the total of the loan is not over 80% of the purchase price of the house being bought. In other words, a loan taken out to buy a home for sale purchased for $100,000 would have to be $80,000 or less, in order to be considered a conventional mortgage.
Of course a Toronto mortgage would be considerably higher than this amount, as would most mortgages in the developed parts of the country, so you can expect to have a higher loan amount. The trick is you will have to make up the balance of the purchase price yourself; for an $80,000 loan you will have to make up the last $20,000 in order to purchase a home with a price tag of $100,000. The higher the price tag on the home, the more money you will have to come up with yourself. These days, if you're looking into a loft, for a conventional mortgage you would need around $50,000 upfront.
Conventional mortgages were a way of assuring banks and other loaning institutions that they would not lose all the money in case of a default. However, in recent years less conventional mortgages have been used as institutions and government sought to make housing more available. This led to people living in places like luxury loft condos when they really could not afford it. The resultant catastrophe in the United States, however, will probably mean the return of the conventional mortgage in many markets across the world.
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