There are many types of mortgage options available in Canada. These include:
- High Ratio vs Low Ratio
- Fixed Rates
- Closed Payments
- Convertible Mortgages
- Hybrid Mortgages
- Reverse Mortgages
High Ratio vs Low Ratio mortgages are based on the amount of down payment you can afford. A high ratio mortgage is a home loan in which the buyer’s down payment is less than 20%, meaning they have to borrow more than 80%. A low ratio mortgage is a home loan in which the buyer’s down payment is more than 20%.
Fixed rate mortgages are constant for the duration of the term. This means your rate is set for the first five years of your loan.
Closed payments usually limit the amount of extra money you can put toward your mortgage each year. Your lender calls this a prepayment privilege and it is included in your mortgage contract.
Convertible mortgages allow you to convert your mortgage from a variable rate to a fixed rate at any time during your term.
Hybrid mortgages are a combination of fixed and variable rates.
Reverse mortgages allow homeowners 55 years and older to convert their home equity into either a lump sum payment or monthly cash payment(s), generally for living expenses.
It’s important to work with a reputable mortgage lender who can help guide you through the process and answer any questions you may have. If you’re in the Greater Toronto Area, Alex Seleznev is a trusted mortgage broker with years of experience helping clients find the right mortgage for their needs. You can contact Alex at alex.seleznev@cleartrust.ca or (416)357-6311 for more information.
To book a 30-minute meeting with Alex and get personalized advice on which mortgage type is best for you, you can use this link: Calendly.com/alex-seleznev. Good luck with your home buying journey!