| MORTAGE DETAILS AND DEFINITIONS |
| Downpayment details: In Canada the type of mortgage you have depends on the amount of downpayment you use for the purchase. If you have 25% or more of the value of the home, you have a conventional mortgage. You can still get a mortgage with less downpayment, in fact a first time buyer can buy a house with as little as 5% of the home value as a cash downpayment. These high ratio mortgages require the lender to be insured against default. This insurance fee is added to the amount of the loan. |
| Biweekly details: One of the best ways to pay off your mortgage sooner is to use the acccelerated bi-weekly payment scheme. You simply take yourstandard calcyulated monthly payment, divide it by two and make that payment every two weeks. The trick is that there are 12 months but 26 bi-weeklys in a year. You are effectively making one extra payment each year. The effect is to accelerate the mortgage loan from 25 years to about 17.5 years. Imagine all the saved interest. This plan is very good for people who get paid on a bi-weekly basis because your payment aligns with your income schedule. For others the plan may be more difficult. |
| Interest rates: The rate charged by the lender frequently changes. It also varies depending on the length of time you want the security of that current rate. When shopping for a mortgage ask about what prepayment options are available and about what penalties are imposed for early payout should you sell the home. In today's market the lenders have 'posted rates' but it is usual to be able to negotiate some reduction in that rate. The following links will show you posted rates and some discounted rates. |