Real Estate Mortgage Services

Real Estate Mortgage Toronto

Real Estate Mortgage Services

Every client's mortgage needs are unique. Fortunately, Northwood Mortgage can help you find a tailored real estate mortgage solution in Toronto that is perfect for your needs.

To purchase a home in Ontario, you must make a minimum down payment of 5 percent that is subject to maximum price restrictions. Besides this 5 percent, you must also be able to verify that you can meet the incurred costs to close your mortgage. These costs typically include survey certificates, appraisal fees, legal fees, and so on.

Subject to qualify, home buyers can choose to borrow the 5 percent down payment with an extra default insurance premium added to the mortgage (usually an additional 0.15 percent for buyers using a mortgage with cash-back opportunity or borrowing the funds from line of credit, credit card, etc) as down payment.

Fixed versus variable mortgage

Traditionally, fixed rate mortgages have been the preferred choice for buyers seeking mortgage financing. The fact that the interest rates stay constant for the entire term of the mortgage means that you have a steady mortgage payment for the entire term. So, buyers are not only cushioned against unfavourable fluctuating rates, but also enjoy the benefit of exact planning and budgeting.

On the other hand, variable mortgages tend to have lower interest rates, but since they're tied to the market prime rate, they tend to vary over the course of the mortgage.

These are not the only options when considering real estate mortgage in Toronto. You might also consider:

Hybrid mortgages

Many first-time home buyers opt for a 5-year fixed rate since their finances don't have much room for interest risk. However, if you have good credit, are financially stable, and are able to save at least 5 percent of your monthly income, consider choosing a shorter fixed term and variable rates.

If you choose variable, find an option that keeps your payment the same, even with interest rate fluctuations. This will give you peace of mind when the rates begin to climb.

If you can't decide between the two options, you should consider a hybrid mortgage. It allows you to split your mortgage into two different rates (perhaps half variable and half fixed) so you can take advantage of lower rates while cushioning yourself when the rates climb.

Portability options

For home buyers looking for a home where they intend to settle for more than five years, then portability, or the ability to move their mortgage to a new real estate without penalty, is not a top concern. If there is a chance that you will relocate after a couple of years, you should find the best portability options that provide you with:

  • The best rates from your lender in the event that you need to add money to the mortgage, such as when upgrading to a more costly home
  • More time to close your new mortgage after selling your old home, preferably more than 60 days

Low-frill mortgages

If you're not considering making huge prepayments, refinancing, or moving in the next five years, you should consider low-frill mortgages. This option gives you a cheaper rate in exchange for bigger prepayment charges (penalties), smaller prepayment privileges, and in some cases, a restriction on refinancing with other lenders until your renewal date has passed.

Talk to real estate mortgage professionals in Toronto

When approaching your bank for a real estate mortgage in Toronto, you will be limited to the mortgage products that are specific to that bank, yet there may be many other, better suited options for you. No matter how big you think your bank is, it is always smart to involve an experienced mortgage broker, like a member of the team at Northwood Mortgage, to help you get the best mortgage deal in Toronto.

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