Accessing your home equity has never been more fair and flexible. In just a few minutes, you can apply for a Fraction Mortgage and receive an estimate for how much equity you could access from your property*.
If this is your first time applying for a Fraction Mortgage, here’s everything you need to know about our application process.
What is a Fraction mortgage?
A Fraction Mortgage allows you to turn a portion of your home equity into tax-free dollars. Unlike existing financial products, such as home equity loans and reverse mortgages, there are no monthly payments when you borrow with a Fraction Mortgage.
You can use the funds from your Fraction Mortgage for just about anything — buying another property, home renovations, retirement income, or any large expense. With no monthly payments, you only have your balance to pay at the end of your 5 year term.
After the 5 year mark, you can continue with no monthly payments required by refinancing your Fraction Mortgage for another term (subject to an appraisal, requalification and 1% refinancing fee).*
What makes Fraction unique?
At Fraction, we believe that all Canadians deserve financial products that allow them to live and age well. That’s why we created the Fraction Mortgage to be the fairest and most flexible way to access your home equity.
In addition to no monthly payments, a Fraction Mortgage charges interest based on the appreciation of your property. Since Fraction Interest Rates are based on the appreciation of your property, your interest rate will automatically adjust to our minimum rate if the value of your home goes down.
No matter your income, credit score, or property, everyone qualifies for our lowest rate if approved for a Fraction Mortgage. See our latest rates here.
How are interest rates calculated?
The interest rate on your Fraction Mortgage is based on the appreciation of your property.
Your personalized interest rate is determined at the end of your term (or when you pay back the loan) based on the average yearly appreciation of your home over the 5 year term.
If your appreciation rate falls below our minimum rate, you will receive our minimum rate.
If your appreciation rate exceeds our maximum rate, you will receive our maximum rate.
If your appreciation rate falls anywhere between our minimum or maximum rate, your interest rate will match your appreciation rate.
See our latest rates here.
Qualifying for a Fraction Mortgage
In order to qualify for a Fraction Mortgage, you must:
• Be a Canadian homeowner
• Have a property located in Ontario or BC
• Have at least 59% of your home paid off
When you submit your application, we will consider the following:
• The type of property
• The appraised value
• The condition and location of your property
• Your credit score
We will also consider your income, but only to ensure you can cover property taxes, insurance, and other ownership expenses. We welcome applicants with self-employed or irregular incomes to apply.
How do I know if my property qualifies for a Fraction Mortgage?
There are many variables that can influence whether your property would qualify for a Fraction Mortgage. The property can be your primary residence, a secondary residence, or even an investment property.
The easiest way to determine if your property qualifies for a Fraction Mortgage is to input your address in our online application.
Before you apply
During the application, you and your co-applicants will be asked to provide information about your current financial status.
Please have the following information ready before you apply:
• Property information (property type, address, estimated value, mortgage balance)
• Income sources (employer, job title, annual income)
• Outstanding debts (creditor, debt type, debt balance, payment amount and frequency)
• Bankruptcy status
• Other owned properties (property type, address, estimated value, mortgage balance)
Recommended: During the online application, you will be asked to provide your Social Insurance Number to help us verify your identity and borrowing history. This soft pull on your credit history will not affect your credit score. However, to confirm your funding later in the process, we will do a hard pull on your credit.
Documents needed to apply for a Fraction Mortgage
In order to be approved for a Fraction Mortgage, you will be required to submit specific documentation. Here is a non-exhaustive list of required documents. What you submit will be based on your individual financial situation and what Fraction requests throughout the application process.
• Income: 2 years tax documents (employed/pension) or 6 months statements for current year if the borrower can’t show and 12 months of bank statements (self-employed)
• Current mortgage statement*
• Property tax details
• Valid Photo ID
• Homeowners Insurance Policy or Tarion (Purchase-new build)
• Inspection (if applicable - deals exceeding $1mm)*
• Credit card/line of credit/loan/other debt balance statements*
• Separation agreement*
• POA docs* and pertaining ID for POA
• Condo/Strata documents* (Condo Status Certificate, AGM Minutes, Financial Statements, etc., Insurance)
• Purchase documents including MLS listing and proof of down payment*
*These documents and items may not be required, it depends on the file and situation of the client.
Ways to apply
In just a few minutes, you can apply for a Fraction Mortgage and learn how much equity you can access from your property.
Our self-service online application is the easiest and fastest way to apply for a Fraction Mortgage. You can start your application at any time by visiting our online application.
We encourage you to contact us if you have any questions whilst completing the online application.
Apply through a broker
If you are a broker and working with a client that would benefit from the Fraction Mortgage, please visit our broker portal to join the Fraction Broker Partner program.
Once you submit an application, our team will review your submission to confirm whether you meet our qualifying requirements. We will also provide an initial estimate of the maximum mortgage loan amount available to you.