Learn the basics about different types of mortgages available to the first time home buyers.
Fixed Rate Mortgages vs. Variable Interest Rate Mortgages
Fixed Rate Mortgage
Your interest rate will not change throughout the entire term of your mortgage.
Variable Rate Mortgage
Your interest rate may fluctuate from time to time because it changes when the TD Mortgage Prime Rate changes.
Conventional Mortgages vs. High Ratio Mortgages
If your down payment is greater than 20% of the purchase price or valuation of the property, you may qualify for a conventional mortgage. That means you are not required to pay for mortgage default insurance.
High Ratio Mortgage
If your down payment is less than 20% of the purchase price or valuation of the property, your mortgage must be insured against payment default by a mortgage insurer, such as the Canada Mortgage and Housing Corporation (CMHC) or Genworth Canada.
Open Mortgages vs. Closed Mortgages
An open mortgage allows you to pay any amount toward your mortgage at any time, without having to pay any prepayment compensation for doing so.
A closed mortgage requires you to make set payments at set times and pay prepayment compensation if you want to pay more, renegotiate, refinance or transfer your mortgage before the end of your term (subject to any prepayment privileges you may have).