Types of Mortgages

Which mortgage product is right for you?

When it comes to which is better – Fixed, Floating or Line of Credit – there is no wrong answer. They all have pros and cons, and the truth is, we can’t predict what mortgage rates will be in the future, or how the economy will affect the rates over time. The key decision making factor depends on you, your personality, and your personal and financial situation and goals.

What we can absolutely commit to is ensuring you’re well informed and fully prepared to make smart mortgage decisions that make sense for you and your family.

Here is a quick overview of each type of mortgage:

Fixed Rate Mortgage
Your interest rate will not change throughout the entire term of your mortgage, regardless of how rates fluctuate.

Suitable for: rate sensitive borrowers, first-time buyers, tight budgets, growing families

Floating/Variable Rate Mortgage
Your interest rate will fluctuate with the bank’s “prime rate” during the term of the mortgage.

Suitable for: high net-worth borrowers with moderate risk tolerance, those planning on paying off the mortgage in the short-term

Line of Credit (LOC)
Also known as a Home Equity Line of Credit (HELOC), a LOC is a special type of credit line secured by the equity in your home. The lender sets a maximum amount that you can access, and you pay interest only on what you actually draw down.

Suitable for: borrowers with strong, stable cash flow that don’t mind paying slightly higher rates in exchange for maximum flexibility

Other mortgage products:

Combination Mortgage
Select lenders offer a popular combination mortgage that combines a fixed mortgage, floating mortgage and/or an LOC – the ultimate in flexibility and security.
Closed Mortgage
Most fixed and floating products are arranged as closed mortgages, which means mortgages cannot be paid out until the maturity date without incurring interest penalties.
Open Mortgage
Although this type of mortgage is generally more expensive than a closed mortgage, it can be paid out without notice or penalty – ideally suited for short-term mortgage needs.