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Choosing the Right Mortgage

Ainsley McDermidProvided by:

Ainsley McDermid, Accredited Mortgage Professional
Global Mortgage Corp
Direct: 604.219.2286
Fax: 1.866.714.4510
[email protected]

Choosing the right mortgage makes owning your home more enjoyable. Understanding the basic types of mortgages available is the first step toward finding the one that fits your lifestyle, budget and long-term needs.

Short-term vs. Long-term?

Mortgages are repaid in a series of terms which typically range from six months to 10 years. A short mortgage is usually for 2 years or less. A long-term mortgage is usually 3 years or more. Short term mortgages are appropriate for people who want to minimize their interest rate and are willing to accept more risk of rate fluctuations at renewal. Long term mortgages are chosen by people who want to lock in their rates and not have to worry about rate fluctuations for several years.

Open or Closed?

Open mortgages can generally be paid off at any time without penalty. They are suited to homeowners who are planning to sell in the near future or those who want the flexibility to make large, lump-sum payments before the end of the term. If you want to pay off the mortgage balance, you will need to wait until the next maturity date or pay the penalty. In exchange for reduced flexibility, you will generally receive a lower interest rate when you choose a closed mortgage.

Fixed or Variable Interest Rate?

When you take out a fixed rate mortgage, your interest rate will never change throughout the term. As a result, you will always know how much your payment will be. With a Variable rate mortgage, your interest rate may vary from month to month. Historically, variable rate mortgages have tended to cost les than fixed rate mortgages. When rates change, your payment remains the same, but the amount that is applied toward interest and principal will change. If interest rates drop, more of your mortgage payment is applied to the principal balance owing. This can help you pay off your mortgage faster.

Would you like more information? You can contact me by telephone at 604.219.2286 or by email at [email protected]. Check out my website at www.valleybroker.ca.


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