| CURRENT MORTGAGE RATES | ||
| Term | Bank Rate | Our Rate |
| 6 Month | 4.55% | 4.45% |
| 1 Year Closed | 4.30% | 2.64% |
| 2 Year Closed | 3.95% | 2.99% |
| 3 Year Closed | 4.55% | 3.39% |
| 4 Year Closed | 4.99% | 3.19% |
| 5 Year Closed | 5.39% | 3.29% |
| 7 Year Closed | 6.39% | 4.79% |
| 10 Year Closed | 6.79% | 4.99% |
| Variable Rate | 2.50% | 2.40% |
What is a fixed rate mortgage?
The interest rate on a fixed-rate mortgage is set for a pre-determined term – usually between 6 months to 25 years. This offers the security of knowing how much your mortgage payments will be for the term selected.
What is a Variable rate mortgage?
A mortgage in which payments are based on the Bank Prime rates, these Bank Prime rates may fluctuate several times a year as they typically follow the Bank of Canada Prime rate.Variable rate mortgage payments remain the same, but if interest rates go down, a greater portion of the set mortgage payment goes towards reducing the principal. However, if bank Prime rate increases, then a larger portion of the mortgage payment goes towards covering the interest and less towards the principal.
In the event of continual bank Prime increases, the lender may determine that the set mortgage payment is not enough to cover the interest portion and may then contact you to arrange setting a greater payment or a lump sum amount at the end of the term to sufficiently cover the interest and principal amounts.
What is an Adjustable rate mortgage?
A mortgage in which the payments are based on the bank Prime rate, however any time that the bank Prime rate changes, the mortgage payment adjusts to reflect an interest portion with the remainder of the payment goes towards the principal balance.
Having an adjustable mortgage ensures the mortgage payment contains sufficient interest and principal amounts whenever the bank Prime rate changes whereas the variable rate mortgage does notprovide this automatic adjustment.
What is the difference between term and amortization?
The “term” of the mortgage should not be confused with the “amortization”. The amortization of the mortgage refers to the entire length of time that it will take for the mortgage to be paid off and the property would be “free and clear” title.
The term is the period for which your current payment obligations are valid. In other words, you may choose a five-year term and a 25-year amortization. This would mean that your interest rate, your payments, and your pre-payment options would be the same for the next five years. At the end of these five years, your mortgage is up for renewal and can renegotiate the term without penalty.
What is the difference between a closed and an open mortgage?
Mortgage terms are either closed or open.
Closed Mortgages
Closed mortgages are offered in terms ranging from six months to ten years.This type of mortgage is closed for the term chosen.If the closed mortgage is paid out prior to the maturity date, an early payout penalty can be charged for breaking the term early.
Closed mortgages can offer piece of mind for the budget conscious customer because the mortgage payments are assured for the term of their mortgage.The closed mortgage offers flexible pre-payment options which for most people; taking advantage of these pre-payment options are vital to reducing their amortization and principal balance owing.This type of mortgage should be clarified with your mortgage associate in order to fully understand the terms and conditions of the closed mortgage.
Open Mortgages
Open mortgages allow the customer to pre-pay some, or all of, their outstanding mortgage obligation at any time without penalty.Open mortgages generally have six-month to one-year terms with higher interest rates than closed mortgages of the same term.
