How do Fixed Rate Mortgages Work?

Fixed rate mortgages can be packaged just as a Canadian fixed rate mortgage or as a hybrid mortgage that converts to a variable rate mortgage (aka ARM or adjustable rate) after a period of time. This means that there is a wide range of fixed rate mortgages that you can find on the market; you’ll want to speak with one of our Toronto mortgage brokers to make sure that you find the right solution for you! Mortgages in Canada are much different than American or even British ones; ours have smaller terms and done right can be paid off much faster than other types of mortgages.

What is Fixed Interest?

Fixed interest means that your rate today should be the same rate as tomorrow and all through your mortgage term. A term is how long you have to pay the current lender, while an amortization period is the life of your loan. So you can have a 10 year term with your lender on a mortgage that has a 25 year amortization period. You’ll want to make sure each time your mortgage comes up for renewal that you can get the best terms possible. This means you’ll want to work with one of our Toronto mortgage brokers to make sure that your fixed interest mortgage is exactly what it seems.

What is the Difference Between a Fixed Interest Mortgage and a Hybrid Mortgage?

One of the newest types of mortgages being offered to Canadians today is something called a “hybrid mortgage”. These give people the option to have the benefits of a fixed rate mortgage now (or later) and the flexibility of a variable rate mortgage at the same time. Some are structured where the fixed rate term comes first, while others will structure it to have the ARM part first and the fixed rate term begin later. It will really depend on what mortgage lender you’re working with and the kind of credit you have. Just remember that just because you have bad credit doesn’t mean you should get a bad loan!

Is it Right for You?

A fixed rate mortgage is great for most people in most situations. They allow you to lock in the best interest rates in modern history right now and reap the benefits of it later. You don’t want to end up with a mortgage that is yo-yoing up and down because it looked like a fixed rate mortgage on the surface; this is why you want to talk with a Toronto mortgage broker like us to make sure everything is on the level and you’re getting the mortgage that is right for you.

If you want to get a great mortgage that’s tailored to your needs, it’s time to talk to one of our Toronto mortgage brokers. We’ll help you find the right mortgage and the right price, and we’ll help you make sure that you’re getting a solution that’s tailor fitted to your needs, not the other way around!