All About Fixed Rate Mortgage Penalties

Posted onJune 19/2017By

Fixed rate mortgages are the most common, and the least risky, mortgage choice. As the name suggests, having a fixed rate mortgage means that you pay the same amount each month towards the principal, over the agreed-upon period of time. Many homeowners choose fixed rate mortgages so that rising interest rates won’t affect their monthly payments. Additionally, a fixed rate mortgage offers easier planning for monthly expenses. Often, fixed rate mortgage plans last two to three years, but you can also get longer ones that last five to ten years. Although fixed rate mortgages seem simple enough, there are some things to consider when choosing a mortgage, specifically what kind of penalties you may incur with a fixed rate mortgage. Fixed rate mortgages tend to be inflexible, and there are two main types of penalties you can incur… Early Redemption Penalty You may be subject to an early redemption penalty…

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How Mortgage Rates Are Determined in Canada

Posted onMay 08/2017By

For many Canadians, their home is the biggest investment they will ever make, and their mortgage the most significant loan. When shopping for a mortgage, people generally look for ways to get low mortgage rates. A mortgage rate doesn’t refer to the size of the mortgage loan, but rather the interest rate on your mortgage. Obviously before you buy, you’ll want to search for a low mortgage rate. There are many factors that affect mortgage rates in Canada, and a fuller understanding of these factors can be an immense help to the inexperienced buyer when applying for a mortgage. In this article, we’ll look at a basic outline of how mortgage rates are determined in Canada, including some ways to get a low mortgage rate. Fixed vs. Variable Rate Mortgages There are two kinds of mortgage loans available to Canadians: fixed or variable rate mortgages. A fixed rate mortgage, as…

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Which Factors Affect Mortgage Rates?

Posted onMarch 13/2017By

When it comes to mortgage rates in Canada, there are so many factors involved it can be hard to keep track. You’re probably aware that the Bank of Canada is a top player in how mortgage rates are determined, but there’s more to it than the BoC simply deciding what rate to set at any given time. Everyone is looking for a low mortgage rate, but the factors that affect variable mortgage rates are different than those that affect their fixed rate counterparts. Below, we’ll explore the differences. Variable mortgage rates A variable rate mortgage is a loan where the interest rate may change during the mortgage’s term. As the borrower, your monthly payment will be same, but if there is a low interest rate, you will still be able to take advantage of it. For example, if the interest rate increases, the amount of your monthly payment that is…

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The Difference Between Fixed Rate Mortgages And Variable Rate Mortgages

Posted onFebruary 09/2017By

One of the first questions that homebuyers ask when taking out a loan is: Should I get a fixed rate mortgage or variable rate mortgage? It’s not something that should be taken lightly, because the difference between the two loans could translate into thousands of dollars over time. One is not necessarily better than the other. The one you eventually choose will depend on your personal taste, financial situation, and the prevailing economic climate. Fixed Rate Mortgages Fixed mortgage rates are as the name implies: fixed. The interest that is established when the loan is first taken out is the interest you will pay for the duration of the loan. This is regardless of the prime interest rate, which could be higher or lower than what you are paying on your mortgage. Advantages: Fixed rate mortgages are a good choice for those who are seeking peace of mind when it…

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How To Get The Best Mortgage Rate

Posted onSeptember 05/2016By

Getting a good mortgage rate depends on factors such as your personal circumstances, the institution you are dealing with and who is handling the mortgage transaction. Being in good financial shape and having steady, reliable income are major factors that can work in your favour when shopping for the best rates. Also, you need to have an experienced, knowledgeable professional who can negotiate on your behalf. If you are dealing directly with a financial institution that is providing the loan, you will have less negotiating power and you won’t be aware of all the loopholes. Here are a few steps you can take to secure the best rates. Improve Your Credit Score Ideally you should be debt-free when trying to secure a mortgage, but if you are in debt and managing it well (making your monthly payments and paying off small loans), then that will have a positive impact on…

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