Mortgage Types: The Breakdown
When searching for a home, choosing the right mortgage is a big part of the equation. Your mortgage broker can always walk you through your options, but really understanding what’s available to you can make things a little simpler. Here’s an easy definition of the mortgage types out there.
Conventional and High-Ratio:
- A mortgage loan with less than 20% for a down payment, is considered high-ratio, and must be insured.
- A conventional mortgage loan has a down payment of 20% or more.
Open and closed:
- Open mortgages allow flexibility to pay as much as you’d like at any time (ideal if you’re expecting large amount(s) of money).
- Closed mortgages with consistent payments are usually favourable to first-time homebuyers.
Fixed and variable:
- Fixed interest rates will not change during the entire duration of your mortgage loan.
- Variable interest rates will fluctuate based on the market.
If you have questions about the mortgage market conditions, and the options available to you, feel free to contact me anytime.
