Marathon Mortgage Mortgage Review: Rates, Lending Guidelines and Who They Suit

Marathon Mortgage Mortgage Review: Programs & Lending Guidelines

How Marathon Mortgage's lending guidelines read from the broker side — the programs on the shelf, how income is qualified, credit floors, terms and where they lend. Consumer-facing policy only: broker submission mechanics and compensation are out of scope, and guidelines change, so confirm anything you are planning around with the lender or a licensed broker.

Marathon Mortgage's Mortgage Offering — Residential

Marathon is a prime lender working through mortgage professionals, and the offering is deliberately narrow. It does one thing — owner-occupied residential mortgages — and does not attempt the alternative market at all.

Insured and insurable mortgages, and conventional uninsured lending to 80% of value, on purchases, refinances and transfers.

Eligible properties: a principal residence of one to four units, a second home of one unit occupied by the borrower or immediate family rent-free, new construction and existing resale homes. Vacation properties qualify only where they meet strict year-round usability conditions.

Also available: purchase-plus-improvements and refinance-plus-improvements, spousal buyouts on a high-ratio refinance, assumptions with prior approval, porting with a blend-and-extend option, and a transfer program that capitalizes up to $3,000 of the outgoing lender's costs.

What is not offered, and the list matters: no rental program at all, no home equity line of credit, no bridge financing, no pre-approvals, and no alternative or equity lending. A rental purchase, an equity take-out on an investment property, or a file with a past insolvency belongs somewhere else.

What Marathon offers in exchange for that narrowness is prime pricing with no lender fees and a clean, conventional product set.

Marathon Mortgage Income and Qualification Requirements

Ratios. 39% GDS and 44% TDS on conventional lending, with insured and insurable files following insurer standards.

Qualifying rate. The greater of the benchmark or the contract rate plus two points. Transfers may qualify at the contract rate, which is a meaningful advantage for a borrower moving an existing insured mortgage.

How income is read. Two years of employment tenure is preferred. Employment income needs a complete employment letter and pay record. Commission income needs two years of filed totals alongside a pay record and job letter. Seasonal income is averaged across two years, and where the most recent year varies by more than 20% from the average, the lower figure is used — a conservative reading that costs a borrower whose income has just improved.

Self-employed borrowers can qualify with verified income on insured, insurable and uninsured files. There is also a stated-income route requiring at least two years of self-employment and a recent tax assessment.

Maternity and parental leave counts at full gross income with an employment letter and a confirmed return date — no reduction for a longer leave, which several lenders in this directory do apply. Pension income counts. Investment income counts with filed returns and current statements. Disability income counts, long-term with an award letter and temporary with employer confirmation.

Support income counts within a cap and stops at older children, and is not grossed up. Child benefits count in full within a cap, also without a gross-up. Other confirmed non-taxable income is grossed up on the standard sliding basis — so the treatment differs by source, and it is worth checking which category a particular payment falls into.

Rental income is only ever supporting income here. A legal suite in the borrower's own home counts at half where the city confirms it is legal. Income from other rental properties is documented through leases and filed rental schedules. There is no program to buy a rental.

Down payment. Gifts from immediate family on insured files, with relatives or an employer permitted on conventional lending — an employer gift is unusual and worth knowing about.

Closing costs. 1.5% of the purchase price must be shown in savings; where it cannot be, the amount is carried as a liability over twelve months rather than the file being declined.

Tax arrears must be paid before a refinance closes.

Marathon Mortgage's Specialty Programs

New to Canada. Purchases of up to two units for borrowers holding a valid work permit or landed immigrant status. Debts held outside Canada are counted in the ratios and foreign rental income is excluded. The program has firm boundaries: it is not available for stated-income self-employed borrowers, refinances, vacation homes, rentals, or borrowed down payment. Down payment rules are strict.

Stated-income self-employed. Through the insurers' programs, requiring at least two years of self-employment and a recent tax assessment showing no amounts owing.

Purchase-plus-improvements and refinance-plus-improvements. Available on every term, capped at the lesser of a share of the improved value or a fixed dollar amount, supported by contractor quotes and invoices with a solicitor's declaration on completion.

Second homes and family plan. A single-unit property occupied by the borrower or immediate family rent-free. Vacation properties must meet strict year-round usability tests — this is not a route to financing a seasonal cottage.

Spousal buyout. Available as a high-ratio refinance where both parties were on title before separating, requiring a finalized lawyer-drafted separation agreement and a sale agreement.

Military and Department of National Defence borrowers are accommodated.

Transfers. Both standard and collateral charges accepted, with the amortization set at the lesser of the remaining schedule or 25 years, no additional funds advanced, and up to $3,000 of penalties and fees added to the mortgage. Insured transfers qualify at the contract rate.

Assignment purchases are considered.

There is no equity program, no net worth program, no bank statement program and no rental program. The specialty list here is short by design.

Minimum Credit Scores & Treatment of Liabilities

Scores. 601 for every borrower on insured and insurable files. 680 on conventional uninsured lending — a high floor, and one of the clearest signals of where this lender sits. A borrower in the low 600s buying conventionally will not fit.

Credit history. The bureau must be less than 30 days old, and a foreign bureau may be required where the borrower has history abroad. Insolvencies are not accepted — no bankruptcy, no consumer proposal, regardless of how long ago it was discharged or how well credit has been rebuilt since. That is a firmer position than almost anything else in this directory, and it is absolute rather than a matter of pricing.

Liabilities. Student loans at 1.5% of the balance. Instalment loans with under six months remaining can be excluded. Secured lines of credit are calculated over 30 years at the benchmark rate — a longer amortization than the 25 years most lenders use, which produces a smaller payment and helps the ratios. Condominium fees count at half. Heating is the greater of a monthly floor or a per-square-foot calculation, and is excluded where it is included in the condominium fees. Shelter costs for a borrower not occupying the property vary by location.

Guarantor income counts only where the guarantor holds an interest in the property. Parents and other relatives may co-apply.

Property taxes may be paid by the homeowner directly or collected through the mortgage, on both insured and uninsured files.

No lender fees.

Terms & Amortization Options

Terms. A conventional range of fixed and adjustable terms, including a six-month fixed at the short end.

Amortization. Insured and insurable: 25 years, extending to 30 for first-time buyers and new builds. Conventional uninsured: 30 years. On a transfer, the amortization is the lesser of the remaining schedule or 25 years, with a floor — so a transfer will not extend the payoff date.

Payments. Monthly, weekly, biweekly, and accelerated weekly or biweekly.

Prepayment. 15% lump sum and a 15% payment increase per calendar year. That is below the 20/20 that most prime lenders publish, and on a mortgage a borrower expects to pay down aggressively it is a real difference.

Penalties. Fixed: the greater of three months' interest or an interest rate differential, plus administrative costs. Adjustable: three months' interest plus costs.

Porting. Available within 45 days of the sale — a tighter window than the 60 to 120 days common elsewhere, and something to align closing dates around. Blend-and-extend is available.

Assumptions are permitted with prior approval, and the incoming borrower must qualify.

Rate float-down. One permitted, requested at least seven business days before closing, though not always available on promotional rates.

No pre-approvals. Live transactions only, so the process starts with a firm purchase agreement.

Registration is a standard charge, which keeps the mortgage straightforward to move at maturity.

Special Notes

• Insolvencies are not accepted, full stop. A discharged bankruptcy or consumer proposal, however old and however well credit has recovered, rules the file out. Most lenders here price for it; this one declines it.
• 680 minimum on conventional uninsured lending. Among the highest published floors in this directory.
• No rental program of any kind. Rental income only ever supports a file; it never drives one.
• No home equity line of credit, no bridge financing, no pre-approvals.
• Prepayment is 15/15, not the more common 20/20.
• A port must complete within 45 days.
• Secured lines are serviced over 30 years, which is more generous than the 25 years used almost everywhere else and quietly improves a stretched file.
• Maternity and parental leave counts at full income with a confirmed return date, without the reduction for extended leave that several lenders apply.
• An employer can gift the down payment on conventional lending — an unusual allowance.
• Closing costs can be carried as a liability where the 1.5% cannot be evidenced in savings, rather than sinking the file.
• Transfers qualify at the contract rate on insured files.
• Insured files often need no appraisal, while conventional uninsured files always require a full one.
• Property standards are strict. No leaseholds, rentals, buildings over four units, mobile or modular homes, co-operatives, farms, recreational properties, agricultural or reserve land, life leases, timeshares, fractional interests, rental pools, co-ownership arrangements, former grow operations, knob-and-tube wiring, properties over five acres, or anything in a flood plain. Minimum sizes are 850 square feet for a house on uninsured lending, and 440 square feet for a condominium in the largest markets, rising to 600 elsewhere.

Service Area

All provinces except Quebec, and not the Northwest Territories.

That covers British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador.

Rural properties are limited. Lending value covers the house plus five acres with no value for outbuildings, and properties over five acres are not eligible at all — a firm cap where several lenders here allow twenty or more.

Minimum purchase price varies by province, and minimum condominium sizes track the market — smaller units are accepted in the Toronto and Vancouver areas and other major urban centres, with a higher floor elsewhere.

Minimum shelter costs also vary by location, and the sliding scale differs by province, program and transaction type, so the maximum available on an expensive property depends on where it sits.

Recreational properties and anything in a flood plain are excluded.

Loan-to-Value Treatment

Credit score is the real gate, more than loan-to-value. 601 opens insured and insurable lending; 680 is required for conventional uninsured, so a borrower with a large down payment and a middling score is pushed toward an insured or insurable structure rather than rewarded for the equity.

The sliding scale varies by province, program and transaction type, reducing lending above market-specific thresholds. On a higher-value property the effective ratio sits below the headline, and the threshold depends on where the property is.

Appraisal requirements follow the structure rather than the ratio. Insured and insurable files generally need no appraisal unless the insurer asks; every conventional uninsured file requires a full one, at the borrower's cost. Automated valuation is available at the lender's discretion.

Loan sizes. Purchases, refinances and transfers each start around $100,000, with the insured maximum set by insurer rules and the uninsurable ceiling set against the property and market.