Get good advice and make great decisions.
It doesn’t matter if you’re shopping for your first mortgage or your seventh — shopping for a mortgage can be overwhelming. The good news is, it doesn’t need to be.
With Conexia as your mortgage broker, you can relax while we negotiate with lenders for the best deal available, at no cost to you.
When you’re ready to get started, all you have to do is apply online or give us a call.
Open Mortgages vs. Closed Mortgages
The main difference between open and closed mortgages is whether you will be penalized for paying off the mortgage faster than agreed to in your mortgage terms.
Open Mortgages can be repaid (in full, or in excess of your minimum monthly payments) at any time during the mortgage term. You can repay the balance faster, without penalty. This is a good option if you anticipate being able to pay your loan down quickly in the near future, or if you plan to sell your home and pay the mortgage in full before the term has ended. Open mortgages generally have a higher interest rate.
Closed Mortgages restrict how much of the principal you can repay early, without being penalized. The amount you can repay early will vary, but generally falls between 10% and 25% of the original principal amount, per year. There may be additional restrictions on when and how often these prepayments can occur
Mortgage Rates
Mortgage rates are a key factor in financing your home purchase. How does it work? Simply put, a mortgage rate is the interest you’ll pay, per year, for a set number of years, on the money you borrow. The lower the mortgage rate, the better.
The other factor to consider is whether your rate will be fixed or variable. Fixed rates don’t change during the mortgage term, while variable rates are affected by the prime rate. Variable rates are often lower, because you are taking a risk that rates may rise.
Learn more about fixed rates vs. variable rates or see the current rates available to you.
Mortgage Term
Lenders are willing to loan you money because they earn interest during the time it takes you to pay it back. That length of time is called the “term”. The longer the term, the more interest you’ll pay to the lender.
Mortgage terms are usually shorter than the life of the mortgage, so you are likely to enter into more than contract over time. At the end of every mortgage term, you can renegotiate, automatically renew, or find a new lender.
Short Term vs. Long Term
A short term mortgage is usually for three years or less. This is appealing if you believe that interest rates will be lower when it comes time to renew. A long term mortgage (three years or more) is preferable if mortgage rates are low and you want the security of knowing what your payments will be for some time to come.
Payment Frequency
Payment frequency is often at your discretion. It is common for lenders to let you choose between weekly, bi-weekly (every two weeks), semi-monthly (twice a month), or monthly. There are advantages to making more frequent payments. When you increase the payment frequency, you reduce the principal amount faster, pay less interest, and pay off the mortgage sooner.
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