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Mortgage Products |
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Our Mortgage Consultants will assist you in selecting the best mortgage product that is tailored to meet your unique needs and objectives. Please contact us
to discuss your options.
Listed below, are the most common mortgage products. 1. Fixed Rate Mortgages Fixed rate mortgages are a very popular choice for Canadian Homeowners. A key benefit of these mortgages is that the borrower's monthly payments for interest and principal remain the same for the duration of the loan regardless of whether the Canada Prime Rate increases or decreases. This makes for easier budgeting and is less volatility than a variable rate mortgage product. Depending on the term you choose the interest rates are commonly fixed (set) for periods as short as 6-months, or 1, 2, 3, 4, 5, 7, or 10 years. The five year fixed rate mortgage has been traditionally the most popular mortgage product in Canada. Key Features:
2. Variable Rate Mortgages A variable rate mortgage allows the borrower flexibility. During times or situations where locking into a fixed rate may not be the best choice variable rate mortgages have typically been a better option for the consumer. A Variable Rate Mortgage has an interest rate that fluctuates (not fixed) and is usually tied to the Bank of Canada's Prime Rate. Prime Rate is the "best" rate that the banks use when pricing loans to their most creditworthy customers. This product can provide significant opportunities in terms of interest rate savings. Since Variable Rate mortgages do not have a fixed mortgage payment amount, the mortgage payment is adjusted as prime rate increases/decreases. Variable rate mortgages are available in Open or Closed Terms, usually for a period of 5 years. The Open feature allows you to payout the mortgage at anytime without penalty. The Closed feature usually allows you to early renew your mortgage at anytime during the 5 year term, to a fixed rate mortgage, usually for a term of 5 years without penalty. If you choose to payout the Closed variable rate mortgage during the term, an interest penalty will apply. Key Features:
3. Secured Line of Credit A secured line of credit is a revolving line of credit (similar to how a credit card works) that allows you to draw from the equity accumulated in your residence. Payments can be interest only, or customized to accommodate your needs. The interest rate on a secured line of credit is usually set a Prime rate. Some institutions may price their product at Prime (+). You have the option of using the line of credit immediately or in the future, therefore control of how you utilize the line of credit. You may choose to take a vacation, purchase a car, renovate your home, and invest for your retirement! 4. Open Mortgages Mortgages typically are closed, which means that a penalty would apply if you wanted to pay it off early. An Open Mortgage allows you the option to pay back the borrowed funds at any time during the term of the mortgage without notice or penalty. There are two options: Fixed Rate Open Mortgage: usually has a short duration, typically 6 months to a year. As the name implies the interest rate and thus your payment are fixed (constant). The interest will be higher than a Closed Mortgage of the same duration. |
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