What Types of Mortgages Are There?
Mortgages can be a confusing subject. Buying or selling a home is an emotional decision and can be very stressful. As a mortgage expert, I will take the confusion out of mortgages and make the process as smooth as possible.
In Canada, there are two major categories that mortgages fall into, either closed or open. Here’s a rundown of each:
- Generally charge you penalties for paying out extra on your mortgage
- Often allow you to make extra payments once per year.
- Generally offer the best interests possible
- Allows you to pay off your mortgage anytime without penalty
- Often carries a higher interest rate tan a closed mortgage
- Administration fees are usually higher
In most cases, it’s better to take the closed product if you do not intend to fully pay out the mortgage in a short period of time.
A Word on Interest Rates
Mortgages interest rates can be either fixed or variable. A fixed rate mortgage is set at a specific rate, and, for the most part, stays at that rate for the entirety of your mortgage. A variable rate mortgage on the other hand fluctuates with Prime.
Choosing the right interest option for your situation depends on a lot of factors. Let me help you make one of the biggest decisions in your life by providing options and advising you on the best scenario for your specific needs.