Mortgage Solutions

MORTGAGE SOLUTIONS AND OPTIONS

MORTGAGE SOLUTIONS FOR PEOPLE IN TORONTO, DURHAM REGION AND ALL OVER THE GTHA

What is a mortgage?

A mortgage is a loan you get specifically to buy or finance a home or property. Unlike a personal loan, a mortgage is secured.
This makes mortgages one of the safest investments around. Even if you can’t pay the mortgage, the bank might be able to get their money back by selling the house. The added security means that mortgage interest rates are much lower than other loans. And with high home prices, that’s a good thing. Mortgage rates are currently near the lowest they’ve ever been in Canada, which means you can save a lot of money by locking in your mortgage rate now.

Types of Mortgages

Conventional mortgages A conventional mortgage in all cities in Ontario including mortgages in Toronto, Scarborough, Mississauga, Markham and all over the GTHA require a down payment of 20% or more. This means the loan is 80% or less of the value of the home. With a conventional mortgage buyers are not required to buy mortgage default insurance.

High ratio mortgages in all cities in Ontario including mortgages in Pickering, Ajax, Whitby, Oshawa, Durham Region and the GTHA. A high ratio mortgage is when the buyer has a down payment less than 20%. If so a buyer must qualify for and purchase mortgage default insurance with CMHC, Genworth Canada or Canada Guaranty. High ration mortgages require a minimum down payment of 5% on the 1st $500,000 and 10% up to $999,000. Mortgage default insurance rates in Ontario range from 2.8% to 4% of the mortgage amount for homes with a purchase price less than $1 million and the amortization term can be a maximum of 25 years. This cost of mortgage default insurance can be added to the mortgage amount paid and over the life of the mortgage however in Ontario pst is charged on the mortgage default insurance amount, the pst portion must be paid upfront with the closing costs. Speak to a mortgage agent for details.

Fixed, variable or convertible mortgages - Fixed rate mortgages is the most popular mortgage option in Ontario with 73% of residents opting for a fixed rate term of 5 years. Wether you want a mortgage in Richmond Hill, Oakville, Brampton, Peterborough or anywhere in the GTHA. A fixed mortgage is when the interest rate remains the same for the term of the mortgage 1, 3, 5, 7 or 10 years regardless if mortgage rates go up or down. With a Variable rate mortgage the interest rate will fluctuate over the term of the mortgage however your payments will stay the same. What will vary is the percentage of your payment that goes towards the interest and the principal. Convertible rate mortgage will start at a variable rate while allowing the home owner to change to a fixed rate at a specified time. Speak to a local mortgage agent for a free consultation.

Open and closed mortgages - An open mortgage in Ontario allows a home buyer to prepay all of a portion of the mortgage without penalty. Open mortgages usually have higher interest rates because of the payment flexibility however they are rare and not offered by many lenders. A closed mortgage does not allow for any prepayment without penalty. Some lenders my offer limited pay down options during certain times of the year. Closed mortgages usually have lower interest rates.