MOST COMMON TYPES OF MORTGAGES AVAILABLE

VARIABLE RATE MORTGAGE

In a Variable Rate Mortgage, the interest rate can fluctuate during the term of your loan, but your payment stays the same. Benefits of Variable Rate Mortgage is that you have the payment consistency of Fixed Rate Mortgage but the flexibility of Variable Rate Mortgage. Downside of Variable Rate Mortgage is that you may end up paying a lot more interest than anticipated at the start of your mortgage and this might end up increasing your amortization period.

ADJUSTABLE RATE MORTGAGE

Adjustable Rate Mortgage (ARM) are similar to Variable Rate Mortgages, but the key difference is that your payment will change every time the interest rate changes. Benefit of ARM is that your amortization will stay the same and you will end up paying the mortgage down at the same pace, but downside is, you may end up increasing your monthly payment in case interest rates go up.

FIXED RATE MORTGAGE

Fixed Rate Mortgage is the most popular mortgage solution in Canada. It guarantees that your interest rate is going to be the same for an entire term. This also ensures that your payment, balance owing, and interest paid in a term will be consistent to what you agreed at the time of getting the mortgage. Due to this clarity, it helps you plan your future with peace of mind.