Canadian mortgage – understanding your options

Posted in Counselling

Canadian mortgage – understanding your options

If you want to purchase a house in Canada, then you should probably do your homework in advance and try to understand the dedicated market. This is necessary if you want to make an informed decision and choose the mortgage that is the best for you. Whether you have already started to look for the perfect home or you are just considering the idea of relocating, being aware of all the options you have available is very important. However, you need to know that there are plenty of alternatives to choose from, so you may find it difficult to take care of everything without professional help. An experienced mortgage agent will help you get the best Canadian mortgage rates, suitable to your needs and future plans. Here are some of the most common questions individuals often have, and the answers that will help you purchase the property of your dreams:


Conventional or high-ratio mortgage – which is the best?

Many people ask which the difference between these two alternatives is, and also which one is the best choice. While the opinions are spread, you should know that there is no perfect option – there is only the most suitable solution for you financial situation. This being said, here are some brief pieces of information: the conventional mortgage is a loan that can cover up to 80% of the lending value of the house, while a high-ration mortgage is likely to cover more than 80% of the total amount you will have to pay. Depending on what you choose, you will also have to deal with different conditions and amounts as far as the down payment is concerned.


Fixed, variable or adjustable interest rate – which is the best?

Once you and your mortgage agent have established the sum you can afford to get, you will also have to choose between fixed, variable and adjustable interest rates (the amount you will need to pay monthly). Again, there is no ideal option; you will only have to opt for the type of rate that seems the best for you. While fixed rates remain the same during the entire term of the mortgage, variable rates involve the same payment each month, but the interest rate alternates, and adjustable rates can be modified anytime during the term.


The mortgage term – which is the best choice?

When it comes to the mortgage term, this can also vary depending on your preferences or your financial possibilities. Normally, the length of time can be from six months up to 10 years. However, you should remember that no matter what you chose, the interest rates and also other mortgage conditions are influenced by this term.