When you are setting out to buy a home in Toronto, there are many different things that need to be considered. One of the most important – arguably the most important – is your mortgage. Right now, interest rates are historically low, and so getting the best Canadian mortgage rate shouldn’t be a difficult task.
Getting a low interest rate on your mortgage is very important, as it can significantly reduce the amount of your monthly mortgage payment. Getting the best Canadian mortgage rate will allow you to get the most house for your money, while still allowing you to remain financially stable, even if other financial requirements should arise.
Prior to applying for a mortgage, it is essential to work out how much you can afford a month. This will ensure that you are prepared when seeking the best Canadian mortgage rate and buying a home. Making sure that you have factored in all monthly costs, such as house insurance, utilities, etc. will mean you know exactly how much you feel comfortable spending on a monthly mortgage payment.
When buying a house in Toronto and searching for the best mortgage rates in Canada, it helps knowing what different types of mortgages are available to you. Which one you choose depends on various factors, such as the amount of down payment you have to put down or your future financial goals.
If you have 25% of the purchase price of the home or more to use as a down payment, you can apply for a conventional mortgage. If you have less that 25% but at least 5% however, you will need a high-ratio mortgage, which then has to be insured by CMHC. If you don’t have at least 5%, you have the option of applying for a no down payment mortgage, which allows you to buy a house even if you have not saved up the 5% down payment. However, be sure to keep in mind that this type of mortgage usually bears a higher rate of interest, and so getting the best Canadian mortgage rate means having a down payment.
What about an open mortgage compared to a closed mortgage option when looking for the best Canadian mortgage rates and buying a home. An open mortgage allows you to make additional payments on your monthly payment, or to pay off the entire mortgage, without any penalties. This means that if you have extra cash on hand, you do not need to worry about being charged additional fees when paying off your mortgage.
A closed mortgage (or fixed rate mortgage) is a mortgage that has an interest rate locked in for a set period of time – meaning that your rate does not change. It also means that you don’t plan on making additional payments as you would with an open mortgage. These are the most popular mortgages, as they are usually the ones that carry the best interest rates in Canada.
Knowing the different types of mortgages available to you when buying a home in Toronto and getting mortgage approval will help you to determine what you want to get from your mortgage.
For more information about buying a home in Toronto and getting the best Canadian mortgage rates available, please contact Paul Mangion by calling The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com