A mortgage should fit your individual priorities,whether they focus on security,flexibility or a combination of both.
Mortgage Options
Open
- Prepay as much as you want or completely pay out at any time without charge.
Closed
- Make regular payments and perhaps limited prepayments
- offers a lower interest rate than an open mortgage of the same term
Convertible
- Offers a lower interest rate than the open mortgage of the same term
- Option to change to a closed term of one year or longer without charge
Fixed Rate
- Interest rate stays constant to the end of the selected term
Variable Rate
- Interest rate fluctuates with the Bank's prime lending rate
- Payments generally remain the same
Choosing a Mortgage Term
A wide range of terms are available from 6 months to 18 years. The length of the term you select depends on your comfort level with the possibility of interest rates rising and the importance of a stable mortgage payment to your budget.
As a General Rule:
Shorter terms are usually attractive if you believe interest rates will drop by the time you'll be selling your home.
Longer terms are preferable if stability or mortgage payments amounts is important to your budget.
If you're worried about interest rate volatility, consider locking in for at least three years.
