Advice Centre

Frequently Asked Questions

All About Mortgage

Mortgage defines any loan which is secured by real estate. It can be divided into “Residential Mortgage” and “Commercial Mortgage” based on the type of real estate the loan is secured by.

  • Residential Mortgage is a loan that is secured by a residential property such as condominium, townhouse, detached house, etc. Residential Mortgage is used to purchase a residential real estate, renovate existing residential property or to acquire additional funds for personal use.
  • Commercial Mortgage is a loan that is secured by a commercial property such as office building, shopping center, retail plaza or industrial warehouse, etc.

For residential mortgage, maximum limit to borrow is 80% of home value. Whereas, for commercial mortgage, 70% of property value is the maximum limit.

Available amount can be differ from your down payment, financial conditions, creditworthiness etc.

Learn more about how much you can borrower with Residential mortgages Calculator

Down Payment is the amount used to purchase a real estate which comes out of your own saving. If you can afford to pay more down payment, you can decrease your loan amount.

For example, in case you buy new house priced CAD$ 500,000 and if you pay 30% (CAD$ 150,000) down payment , your mortgage loan amount would be CA$350,000.

If your down payment is less than 20% of total amount, mortgage insurance is required. This is legal requirement by Government of Canada and the purpose of mortgage insurance is to protect financial institution (lender) in case borrowers are not able to make mortgage payment.

Mortgage insurance allow you to purchase real estate with less down payment but certain percentage of premium will be added as an additional cost. Premium will vary depending on your mortgage condition (amount, amortization  period and down payment amount etc.) 

Mortgage can be divided into two kinds; ‘Insured Mortgage’ and ‘Uninsured mortgage’. Shinhan Bank Canada is offering ‘Uninsured Mortgage’ only.

Term for mortgage is the length of period the borrower must commit to the mortgage rate and conditions with the lender. you either have to pay off remaining balance or renew with another term when the existing term ends.

At Shinhan Bank Canada, terms range from 1 to 5 years.

There are two types of term for a mortgage;

  • Closed Term: You can only prepay a limited amount of principal without paying prepayment penalty. The mortgage rate for a closed term is generally lower than the rate for an open term mortgage.
  • Open Term: You can make a partial or full repayment anytime without paying prepayment penalty. However, the mortgage rate for an open term mortgage is generally higher than the rate for a closed term mortgage.

Amortization Period is the total life of the mortgage. At the end of the amortization period, the mortgage is expected to be paid in full. 

The maximum amortization period permitted for residential mortgages and commercial mortgages are as below;

  • Residential Mortgage  up to 30 Yrs
  • Commercial Mortgage up to 25 Yrs

Longer amortization period means you will be paying lower monthly / bi-weekly payments, but you will pay more in interest over the life of the loan as it takes longer to fully payoff the mortgage.

There are two main payment methods for a mortgage at Shinhan Bank Canada:

  • Fixed payment : You will pay fixed amount on every payment schedule, but the principal and interest portion paid will be different within the fixed amount. The principal repayment portion will gradually increase as long as the interest rate remains constant.
  • Variable Payment (for variable Rate loans only): You will be paying fixed amount of principal and accrued interest on their regular payments. Regular payment amount will differ each payment, but the amount of principal repaid will be constant throughout the term. Total interest to be paid at the end of the amortization period will be the less compared to the other payment method, as the interest amount will lower due to faster principal reduction at earlier stage of the loan.

Payment can be made either Monthly or Bi-Weekly .

If you would like to pay off your mortgage faster, there are ways you may consider:

1. Change in regular payment frequency/method/amount

You can request to increase your payment frequency, your regular payment amount or change the payment method to pay down your mortgage faster.

2. Prepayment

A prepayment (also known as lump-sum payment) is when a borrower wishes to pay down a mortgage partially or in full before the end of the term. Prepayment penalty will be charged if you make a payment toward your principal beyond prepayment privilege. For closed term mortgages, Shinhan Bank Canada lets the borrowers to make a prepayment up to 10% of the outstanding balance annually without a penalty (based on anniversary date, not calendar date).

Please contact our branch for more information.

Branch Info:

[Prepayment penalty Calculation]

Variable Interest Rate Mortgage: Equal to 3 months of interest of the remaining balance.

Fixed Interest Rate Mortgage: Higher of the following:

  – 3 months of interest

  – IRD (Interest Rate Differential) which is determined by Posted rate for the agreed term and current posted rate for the remaining term. 

Refer to your Cost of Borrowing Disclosure Statement for more detail on how prepayment penalty is calculated, or use Mortgage Prepayment Penalty Calculator to see approximately how much your prepayment penalty will be.

It is the policy of the Bank to charge an equitable interest rate to the borrowers with the amount of risk involved in a credit transaction and the amount of services provided.

The Bank is entitled to a fair interest rate and will come up with sincere services and reasonable conditions to its customers in return.

We can provide you professional advices and our competitive rates.

Please refer to the link below for more detailed information.

Branch Info:

Mortgage Rate:

There are two types of Interest Rate, which is Fixed Rate and Variable Rate upon agreement.


Chart is showing how fixed & variable rate change for a period.


  • Fixed Interest Rate: Interest rate and regular payments will stay the same until the end of the term. You won’t have to worry about rate fluctuations as your rate will be protected.
  • Variable Interest Rate: Interest rate may fluctuate according to changes in prime rate. Variable Rate is determined as Prime rate plus Spread. Spread will not change during the mortgage term, but Prime rate may. Your payment will be paid more toward interest if the prime rate increases. On the other hand, your payment will be paid more towards principal if the prime rate goes down. 

You can find Shinhan Bank Canada’s Prime Rate at:

Residential Mortgage & Personal Loans

For residential mortgages, there are products without prepayment penalties before the term maturity. Customers can receive a detailed explanation by visiting a branch.

Shinhan Bank Canada provides monthly or bi -weekly repayment options. Customers may choose any of the available options according to their needs.

Overdraft is an attached loan amount on your chequing account so you can access the revolving amount whenever it is needed. Loan limits need to be applied with credit applications. It is often called “HELOC” from other institutions for secured overdrafts.

We provide Stand-by L/C loan products for customers wishing to receive a loan using assets in Korea as collaterals. Customers can receive a detailed explanation by visiting a branch.

When you apply for a mortgage/loan by pledging a collateral, we perform an appraisal for the unbiased valuation of the collateral. This appraisal is a key factor in determining the amount of the mortgage/loan.

No. The Bank outsources the appraisal process to professionals who are able to perform the task without bias and under strict standards. Appraisal requests shall be distinguished between commercial properties and residential properties.

Loan amounts are not decided solely by real estate valuations, similar to how individual credit ratings are not the only determining factor for the loan approval process. The applicant’s credit history, transaction history, and other relevant factors shall be analyzed to determine the amount of the loan. However, due to the characteristics of residential mortgages, we limit the loan amount to a maximum of 80% of property values and 70% for commercial property values.

Credit Score is a three-digit number in your credit report.  It shows how well you manage your credit and how risky it would be for a lender to lend you money.  SHBC uses FICO score from Equifax Canada.

Please visite Equifax website for more information.

Commercial Mortgage & Loans

Shinhan Bank Canada provides commercial mortgages/ loans tailored to each customer to purchase real estate property or to use his/her property to receive a loan. Commercial mortgages are to assist with purchase of property, financing of property, property improvement.

What real estate assets are eligible for commercial mortgages?
The following types of real estate are eligible for commercial mortgages:
– Apartment of more than 4 units
– Office
– Mixed-Use (Retail & residential) buildings
– Retail spaces, strip malls and shopping centers
– Hotel/motel and other accommodation facilities
– Storage and other industrial buildings
– Gas stations, car wash and other special purpose real estates

Business loans are not only for the purchase of businesses but also be issued to help with finance management, expansion of the original business, purchase of inventory, and various other needs.

Business loan repayment terms depend on the size of the business and the type of collateral. Shinhan Bank Canada typically allows for up to 5 years for repayment of credit-based loans, and up to 25 years for repayment of collateral-based loans.

Business loan and commercial mortgage interest rates are mainly based on the Bank’s Prime Rate and vary depending on the size of the loan, size of the business, repayment period, type of collateral, and other factors. Please visit a branch for more detailed information.

CSBFP is a Canadian government program that aims to help small businesses by making it easier to get loans from financial institutions. The maximum loan amount is $1 million, Please see Canada Small Business Financing Loan section, or visit Government of Canada website for more detailed information.

Businesses in Canada with gross revenues of $10 million or less are eligible. Such businesses can be corporations, sole proprietors, partnerships, cooperatives, or non-profit organization conducting a business. Please visit Government of Canada website for more detailed information.

Additional Help & Other Resources

Shinhan Bank is dedicated to assisting customers to make the right financial decisions. If you have any questions, please contact one of your branches. Click here to contact us.

As additional resources, please refer to the links below, provided by Financial Consumer Agency of Canada (FCAC) to help you better understand mortgages and loans.

▪ General Information

▪ Mortgages

▪ Loans and Lines of credit

We are always open to hear and discuss your financial circumstances.
Click here to contact us.

Additionally, below are some of the organizations that offer education and tools to aid you in financial decision making.

▪ ABC Life Literacy Canada

▪ Canadian Foundation for Economic Education

▪ Mcgill Personal Finance Essentials

We are sorry to hear about your difficulties.
Shinhan Bank is committed to providing customer in need of assistance.
Click here to contact us.

Alternatively, if you would like to seek assistance outside of Shinhan Bank Canada, various Credit Counselling agencies are available for consultation.

For example, you may find your counselling agency from the associations below:

▪ Credit Counselling Canada

▪ Canadian Association of Credit Counselling Service

Please keep in mind that it is important to ensure that the counsellor has the

adequate qualifications, reasonable fees, and the right services that you need.

Information of how to find the right agency can be found on the government website below:

[Promotion] Up to 30% prepayment privilege for residential mortgage borrowers who are paying interest only. Please contact your branch for more details.