If you are looking to buy a home in Ontario, it’s important to understand the different types of mortgages available to you. From fixed rate mortgages to variable rate mortgages and more, there are a variety of mortgage options to consider. In this article, we’ll provide an overview of the different types of mortgages available in Ontario, as well as their advantages and disadvantages.
Fixed Rate Mortgages: A fixed rate mortgage is a type of mortgage where the interest rate remains the same for the entire term of the mortgage. This can be beneficial as it offers more predictability in terms of your monthly payments, since the interest rate will not change over time. The downside to a fixed rate mortgage is that you may end up paying more if interest rates drop during the term of your mortgage.
Variable Rate Mortgages: A variable rate mortgage is a type of mortgage where the interest rate can change over time. This can be beneficial as you may be able to take advantage of lower interest rates if they drop. However, the downside is that you may end up paying more if interest rates increase.
Combination Mortgages: A combination mortgage is a type of mortgage where you can combine a fixed rate mortgage and a variable rate mortgage. This can be beneficial as it allows you to take advantage of both the predictability of a fixed rate mortgage, as well as the potential savings of a variable rate mortgage. The downside is that you may end up paying more if interest rates increase.
Portable Mortgages: A portable mortgage is a type of mortgage that allows you to move your mortgage to a new home. This can be beneficial if you plan to move in the near future, as you won’t need to go through the process of applying for a new mortgage. The downside is that you may have to pay a fee for porting your mortgage.
High Ratio Mortgages: A high ratio mortgage is a type of mortgage where the amount of the loan is over 80% of the value of the home. This can be beneficial if you don’t have the funds to make a large down payment. The downside is that you may have to pay for mortgage default insurance, which can add to the cost of your mortgage.
These are just a few of the different types of mortgages available, in Ontario. It’s important to do your research and understand the different types of mortgages before making a decision. There are a variety of factors to consider, such as your budget, financial goals, and long-term plans. Make sure you speak with a mortgage specialist to ensure that you choose the best mortgage for your needs.