What Rate Do You Qualify For?
There are various types of mortgage rates offered by lenders. The two main categories are fixed-rate mortgages and variable-rate mortgages. Here’s an overview of the common types of mortgage rates in Canada:
5-Year Fixed-Rate Mortgage: This is one of the most popular mortgage products in Canada. The interest rate remains constant for a five-year term, providing borrowers with predictability in monthly payments.
10-Year Fixed-Rate Mortgage
Similar to the 5-year fixed-rate mortgage, but with a longer fixed term. It offers an extended period of rate stability.
Shorter-Term Fixed-Rate Mortgages
Some lenders offer fixed-rate mortgages with terms of 1, 2, 3, or 4 years. While less common, they provide shorter periods of interest rate certainty.
Variable-Rate Mortgages (VRM) and Adjustable-Rate Mortgages (ARM)
5-Year Variable-Rate Mortgage: The interest rate is variable and can change based on fluctuations in the lender’s prime rate. Borrowers benefit from potential interest rate decreases but are exposed to increases.
3-Year Variable-Rate Mortgage
Similar to the 5-year variable-rate mortgage, but with a shorter variable period.
Open Variable-Rate Mortgage
This type allows borrowers to pay off the mortgage in part or in full at any time without penalties. However, open variable-rate mortgages often have higher interest rates.
Fixed or Variable Hybrids
5-Year Fixed/Variable Hybrid Also known as a “combined” mortgage, this option allows borrowers to split their mortgage into fixed and variable components. For instance, a 5/5 hybrid might have a fixed rate for the first five years, then become variable for the next five.
Cash Back Mortgages
Some lenders offer mortgages with a cashback incentive, where borrowers receive a lump sum at the time of closing. However, these mortgages often come with higher interest rates.
Collateral Charge Mortgages
Instead of registering the mortgage for the loan amount only, a collateral charge mortgage allows the lender to register a higher amount, providing flexibility for future borrowing without additional legal fees.
High Ratio and Conventional Mortgages
A high ratio mortgage is one where the borrower has a down payment of less than 20% of the home’s purchase price, requiring mortgage default insurance. A conventional mortgage, on the other hand, is where the down payment is 20% or more.
Variable rate Mortgages as low as Mortgage Prime – .70%
Prime Rate set at 2.45%
Fixed rates starting as low as 1.79%
Rates stated are based on insured purchased (convential rates do vary from advertised rates, contact us for unadvertised specials)
OAC, E&OE, Rates are subject to change