Types of Mortgages

Closed Mortgage

• This is a good choice for those that want security in knowing that their monthly payments are fixed for a certain term. However, it lacks the option of repaying the entire amount of the mortgage upon request.

Conventional Mortgage

• Regulations under 'The Bank Act' prohibit lenders from lending in excess of 75% of the purchase price or the appraised value of a property without obtaining a Hi-Ratio Insurance. A loan for up to 75% of the purchase price of a property is a conventional mortgage.

Convertible Mortgage

• A short term mortgage usually ranges from six or twelve months which allows the borrower to switch into a longer term at any time without penalty.

First Mortgage

• This kind of mortgage is given the first priority at the registry office. It can be conventional or high ratio. The lenders give the borrowers the best rate of interest.

High Ratio Mortgage

• A loan for 75% to 95% of the purchase price of a property.

Open Mortgage

• This type allows the borrowers to repay a portion or the total amount of their mortgage at any time without penalty. Ideal for those who plan to sell their homes in the near future.

Second Mortgage

• A higher interest rate loan that provides borrowers with additional financing if the first mortgage does not meet their total financial requirements.

Variable Rate Mortgage / Adjustable Rate Mortgage

• A mortgage where payments can be fixed or variable from one to five years, but the interest rate could change from month to month or quarterly depending on the prime bank rate. Payments and balance outstanding are adjusted accordingly. They can be converted to a closed mortgage at anytime.