A mortgage term is the length of time that the RATE is set for. The most common term is a 5 Year term, which is then re negotiated after 5 years is up on the ‘renewal date’. The Amortization is the time that the PAYMENT is based on. The longer the amortization, the lower the payment. A typical amortization is 25 years, but can be as little as a few years or as long as 35 years.
A fixed rate mortgage will guarantee your rate for the length of the term -‘set it an forget it!’. Fixed will usually carry less risk than a Variable rate wish can be lower for a period of time, but will float higher when the Bank of Canada eventually increases interest rates. Contact us for more information on which could be right for you.
In Canada, the minimum down payment is 5% – however this can be gifted by family or potentially loaned if needed. Any down payment under 20% must be ‘insured’ by the Canadian Mortgage and Housing Corporation (CMHC), or other mortgage insurer, and this requires a % based fee that is built into the mortgage – not paid up front.
To get the lowest rates in the market, the credit score should be above 680 points (out of 900). If any credit lines are maxed out or if several payments have been made late – this can negatively affect your score. If unsure of your score click here for more information.