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9/24/2026

Mortgage Mistakes in Your First Year of Ownership

New homeowner? Avoid these common first-year mortgage mistakes, from ignoring your prepayment options to missing your renewal, with a simple checklist.

Mortgage Mistakes in Your First Year of Ownership

Getting the keys feels like the finish line, but the first year of ownership is when a lot of good and bad habits get set. Here are the mistakes I’d most like new homeowners to avoid, and what to do instead.

1. Not reading what your mortgage actually says

Most people sign the documents and never open them again. The FCAC says a federally regulated lender must set out your prepayment privileges, charges and other key details in a single information box in your agreement, and must tell you how it calculates prepayment charges. Take twenty minutes to read yours. Note your maturity date, your prepayment privileges, and how the penalty is calculated.

2. Treating the approval amount as your budget

Being approved for a certain payment doesn’t mean it fits your life. Now that you’re in the home, watch how the real budget works, and build a cushion for repairs and surprises. The FCAC reminds buyers to plan for ongoing maintenance, and it’s easy to underestimate.

3. Overlooking your payment frequency

Your payment schedule can make a real difference. The FCAC explains that accelerated weekly or biweekly payments put more money toward your mortgage than monthly payments do. Accelerated biweekly, for example, adds up to the equivalent of one extra monthly payment per year, which can save interest. Choose a schedule that also lines up with your pay dates so it doesn’t strain your cash flow.

4. Ignoring your prepayment privileges, or misusing them

The FCAC advises making full use of your prepayment privileges every year if you can, since extra payments go toward principal. But keep two things in mind. If you go over your allowed amount, you may pay a penalty. And normally, once you increase your regular payments, you can’t lower them again until the end of your term, so don’t commit to an amount you might not be able to keep up.

5. Missing payments, or waiting too long to ask for help

Set up automatic payments so a payment never slips by accident. If money gets tight, contact your lender early. The FCAC expects federally regulated lenders to help borrowers who are struggling because of exceptional circumstances, and lenders may offer options such as a skip-a-payment feature, though these typically have limits and may cost extra interest. If you have a variable rate with fixed payments, ask your lender about your trigger rate, which is the rate at which your payment only covers interest.

6. Taking on big new debts right away

It’s tempting to finance furniture, a car, or renovations right after closing. New debt affects your credit and your monthly budget, and it can make it harder to switch lenders or borrow against your home later. If you’re planning big projects, run the numbers first.

7. Forgetting about property taxes and other bills

Find out whether your property taxes are paid along with your mortgage or separately, so a bill doesn’t catch you off guard. Budget for utilities, insurance and any condo fee increases as well.

8. Skipping protection for your family

If something happened to your income or your health, how would the mortgage get paid? FSRA notes that life insurance products can help cover the value of a mortgage loan. Insurance is a separate conversation with a licensed insurance professional, but it’s worth having one.

9. Borrowing against the house too quickly

Opening a home equity line of credit or refinancing early can be useful, but it can also come with penalties, fees and higher debt. See the posts on breaking a mortgage and on home equity for how to think it through.

10. Forgetting your renewal date

A five-year term goes faster than it feels. Put your maturity date in your calendar, and set a reminder about five months before it. The renewal post walks through what to do at 120 days, and starting early is one of the best ways to save money.

Your first-year checklist

WhenWhat to do
First monthRead your mortgage documents. Note your maturity date, prepayment privileges and penalty method. Set up automatic payments. Keep your closing documents together.
First 3 monthsBuild your emergency fund and repair budget. Confirm how your property taxes are paid. Review your payment frequency.
6 monthsCheck your budget against reality. Decide whether you can use your prepayment privileges. Avoid new large debts.
12 monthsReview your statements, check your progress on the balance, and put a renewal reminder in your calendar.

Just got the keys?

Congratulations! If you’d like a quick review of your mortgage and a simple plan for the first year, send me a note. Visit mortgagejoe.ca to get in touch or learn more.

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