|
Closed, Open and Convertible Mortgages.
Closed Mortgage
Interest Rates of closed term mortgages are
generally lower than open term mortgage.
You will pay a charge if you wish to pay
your mortgage prior to the end of its term.
Open Mortgage
An open mortgage can be repaid in part or in
full at any time without prepayment charges.
Open mortgages can be converted to any
other term without charges.
Convertible Closed Mortgage
Same benefits as a closed mortgage, but can
be converted to a longer, closed term with no
prepayment charges.
|
|
Mortgage Down Payment Options
Conventional Mortgage
A downpayment of at least 20% is required
for a conventional mortgage.
Low Down Payment Insured Mortgage
As low as 5% is required for an Insured
mortgage, low down payment mortgage
must be insured to cover potential default
of payment.
Using RRSP's as down payment
First time home buyers are eligible to use
up to $25,000 in RRSP savings per person
for a down payment on a home. As long as
you repay it within 15 years it is not taxable.
|
|
|
Variable, Fixed and RateCapper
Rate Mortgages
Fixed Rate Mortgage
The interest rate is locked for the full term of
the mortgage, the payment is set in advance.
Fixed rate mortgage can be open or closed.
Variable Rate Mortgage
Mortgage payment are set for the term,
interest rates may change during the term,
more or less of the payment is applied to
the principal depending on the interest rate.
RateCapper Mortgage
RateCapper mortgage has a variable interest
rate with a closed 5-year term. The interest
rate fluctuates as prime rises and falls, but
will never exceed your capped rate.
|
|
Mortgage Amortization
The mortgage amortization is the number of
years you will need to pay off your mortgage.
The standard amortization period is 25 years,
the shorter amortization period will save you
in interest cost.
The longer amortization period will allow you
to have lower monthly payments, but this will
increase the interest that you pay during the
amortization period.
|
|