An Open Mortgage allows you the flexibility to pay off some or all of the mortgage at any time, without a penalty. Interest rates are usually higher and are tied to the Bank Prime.

A Closed or Fixed Mortgage offers you the security of locking in your interest rate for the term of your mortgage, so you know exactly how much principal and interest you will be paying on the mortgage during the term. Terms range from 6 months through to 10 years. Should you wish to pay off all of the mortgage prior to the end of the term you will have to pay a penalty. 3 months interest or interest differential is standard.

A Variable Rate Mortgage allows take advantage of today's low Prime Rate. Most variable rate products are set either at Prime or slightly below. The terms range from 3 - 6 years. Payments vary depending on the product or lender you choose. In some cases you can fix your payments for up to 5 years, but the interest rate will fluctuate as the Bank Prime Rate changes. In other cases your monthly payments will fluctuate depending on how many time the Prime Rate Changes during your term.

To determine 'affordability',we will need to know your Taxable Income along with the amount of any debt outstanding and the monthly payments. Assuming it is your principal residence you are purchasing, they will then calculate 32% of your income for use toward a mortgage payment, property taxes and heating costs. If applicable, half of the estimated monthly condominium maintenance fees will also be included in this calculation.

A minimum down payment of 5% is required to purchase a home, subject to certain maximum price restrictions. For instance, in the Greater Vancouver Area the maximum purchase price with 5% down is $300,000. Any purchase price in excess of $300,000 requires a minimum of 10% as a down payment. In addition to the down payment, you must also be able to show that you can cover the applicable closing costs (i.e. legal fees and disbursements, appraisal fees and a survey certificate, where applicable).

A High-Ratio mortgage is one where the amount to be borrowed by way of a mortgage is greater than 75% of the purchase price, or the appraised value, whichever is less. High-Ratio mortgages generally require Mortgage Loan Insurance provided by either Canada Mortgage and Housing Corporation (CMHC), or GE Capital (GE), a private Insurer.

A conventional mortgage is usually one where the down payment is equal to 25% or more of the purchase price(or appraised value if lower), a loan to value of or less than 75%, and does not normally require Mortgage Loan Insurance.

Most lenders will accept down payment funds that are a gift from family as an acceptable down payment. A gift letter signed by the donor is usually required to confirm that the funds are a true gift and not a loan. Where the mortgage requires Mortgage Loan Insurance, Canada Mortgage and Housing Corporation requires the gift money to be in the purchaser's possession before the application is sent in to them for approval.

A Pre-approved Mortgage provides an interest rate guarantee from a lender for a specified period of time (usually 60 to 90 days) and for a set amount of money.

The easiest way to get a Mortgage Pre-approval is by filling out the online applicationt. You will be asked some questions to determine your financial situation and then Home Mortgage Canada will calculate the size of mortgage you qualify for, using this information.

Most successful Real Estate Professionals will want to ensure you have a Pre-approved Mortgage in place before they take you out looking for a home. This is to ensure that they are showing you property within your affordable price range.

In summary, a Pre-approved Mortgage is one of the first steps a Home Buyer should take before beginning the buying process.

No, let us begin shopping around for an interest rate at least 90 days before your mortgage matures. Lenders will often guarantee an interest rate to you as much as 90 days before your mortgage matures. And, as long as you are not increasing your mortgage, they will cover the costs of transferring your mortgage too. This means a rate promised well in advance of your maturity date, thus eliminating any worries of higher rates.