| Type |
Feature |
Benefit |
| Fixed Rate Mortgage |
Interest rate locked in for the term of the mortgage, standard prepayment conditions apply. |
- Security and peace of mind.
- The interest rate will not increase over the term of the mortgage.
- Monthly payments do not change.
- If the interest rate goes up you will not pay more interest over the term of the mortgage.
|
Variable Rate Mortgage
(not available at this time) |
Interest rate changes with the market. |
- Low interest rate. Potential interest savings.
- If interest rates go down you could pay off your mortgage faster with fixed mortgage payments.
- Payments will remain constant with mortgage rate cap.
|
Open Mortgage
(6 month open term) |
Pay off your mortgage in part, or in full, at any time without penalties. |
- Flexibility. Short-term option.
- An open mortgage offers flexibility to pay off your mortgage in part, or in full, at any time without penalties.
- It also allows you to renegotiate at any time.
- This option comes at a higher interest rate and therefore is likely only considered for the short term.
|
| Closed Mortgage |
Interest rate locked for the term of the mortgage, cannot pay off your mortgage in part of in full. |
- Closed term mortgages are usually the better choice if you’re not planning to pay off your mortgage in the short term.
- Interest rates are generally lower than for open term mortgages.
- Closed term mortgages offer you the ability to save on interest costs and pay off your mortgage faster.
- You will pay a prepayment charge if you wish to renegotiate your interest rate or pay off your mortgage balance prior to the end of its term.
|
| Short-term Mortgage |
Usually 2 years or less |
- Usually at a lower interest rate
|
| Long-term Mortgages |
Usually 3 years or more |
- Security and peace of mind
|
| Amortization |
Can affect how much interest you pay over the life of your mortgage |
- The length of time you will need to pay off your mortgage completely, assuming the interest rate stays the same throughout that period.
- The standard amortization period is usually 25 years, but shorter and longer (up to 30 years-has to be conventional financing) time frames are also available.
|
