Your basic choices in selecting a mortgage include:
Conventional vs. high-ratio mortgages – A conventional mortgage equals no more than 80% of the appraised value or purchase price of the property, whichever is less. A high-ratio mortgage is usually for more than 80% of the appraised value or purchase price. It’s often referred to as an NHA mortgage because it is granted under the provisions of the National Housing Act and must, by law, be insured through CMHC or another qualified insurer for which the borrower pays the insurance premium (which can be included in the mortgage amount).
Closed vs. open mortgages – Closed mortgages usually offer lower interest rates than open mortgages of the same term, but open mortgages let you pay off as much as you want, any time, without penalty.
Short term vs. long term – The term you select is important, too. Short term mortgages are appropriate if you believe interest rates will be lower at renewal time. Long term mortgages are suitable if you feel current rates are reasonable and you want the security of budgeting for the future. This is especially important for first time homebuyers.
Fixed rate vs. variable rate – You can choose a fixed or variable interest rate. A fixed rate mortgage allows you to budget precisely for whatever term you select, from one to as many as 10 years. A variable rate mortgage fluctuates with the market.
Specialty mortgages that creatively combine the best of all worlds – Ask us about “hybrid” mortgages that allow even greater flexibility at no additional costs to you!