Types of Mortgages
March 3, 2021
No two home buyers are alike, so the best mortgage option for one borrower is likely unsuitable for another. It’s up to the buyer and his or her mortgage broker to make the right decision based on the individual needs.
What are the most popular mortgage options in the Canadian Market?
Well! in general, small to mid-size mortgages are most popular, as demand for these is certainly the most. Small size mortgages are secure for both lender and borrower.
Canada Mortgage and Housing Corporation (CMHC)
+ The Canada Mortgage and Housing Corporation (CMHC) is a government department that acts as Canada’s national housing agency. Its mandate is to help Canadians access affordable housing options. Providing mortgage insurance to homebuyers.
+ CMHC or Canadian Mortgage Housing Corporation is a government financial institution that guarantees a loan with the bank at a premium. It enables you to buy a home with as low as a 5% down payment.
+ Borrowers should always go for NHA (National Housing Act Canada) approved lenders.
+ In Canada mortgages issued by federally regulated lenders to borrowers who have less than a 20 percent down payment must be insured.
+ Know your mortgage loan amount, interest rate, monthly payment, amortization, payment frequency, and mortgage term before you sign the contract.
+ Carefully choose the payment frequency, Payment frequency refers to how often you make your mortgage payments. You can also choose an accelerated payment schedule. Accelerated payments allow you to make the equivalent of one extra monthly payment each year. This can save you thousands of dollars in interest over the life of your mortgage.
Choose Your interest rate
The interest is the fee you pay to the lender for borrowing money. The higher your interest rate, the higher your mortgage payments will be. Every time you renew your mortgage term, you renegotiate your mortgage interest rate. This means your mortgage payments can be higher or lower in the future.
When you apply for a mortgage, your lender offers you an interest rate. Your mortgage broker can negotiate this rate to see if lenders can offer you a lower rate. Different lenders may offer different interest options.
Fixed interest rate
Variable interest rate
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