Information on the Best Mortgage Rate to Choose. Choosing a mortgage rate is not always a simple process and there are many things to consider. Mortgage rates are still at record lows and there are some great offers, but a best mortgage rate should not be the only thing to consider. If you’re like the majority of Canadians with a mortgage, chances are you will be paying off your mortgage over a number of years, so you should become familiar with the various types of mortgage rates.
Fixed Rate – The fixed mortgage rate will be fixed for one of the following terms: 6 month, 1, 2, 3, 4, 5, 7 and 10-year terms and you have the security of knowing your rate and payment will not change during the chosen term. Fixed mortgage rates offer repayment certainty but tend to be more restrictive due to making limited extra repayments and no flexibility over the term should mortgage rates drop. The fixed rate is also higher than the variable rate.
Variable Rate – Variable mortgage rates are lower than the fixed and you have the option to convert your mortgage anytime to a longer term and you can also lock into a fixed rate anytime within the your mortgage term. The variable rate can fluctuate; it can go both up and down and this can affect your repayments and if they go higher, increase your interest costs over the life of your mortgage and lengthen the amortization period.
Combination Mortgage (or also called Hybrid Mortgage) – Get the best of both worlds by combining fixed rate and variable rate and you’re combining both flexibility and security. The combination or hybrid mortgage option maximize low interest rates while at the same time retaining the security of a fixed mortgage.
Contact the best mortgage brokers at the Oakville Mortgage Team to discuss the type of mortgage rate best suited for you. Whether you are a first time home buyer, New to Canada or looking to refinance or renew; get expert advice, great rates and many mortgage lenders to choose from.