Smart Start Mortgage Experts

Bank of Canada holds key interest rate steady at 5%

OPEN VS. CLOSED MORTGAGES

Open mortgages give homeowners the ability to pay off their mortgage at any time without penalty. The downside of open mortgages is that the interest rate is higher.

Closed mortgages have a penalty if you pay off the mortgage before your term ends, but generally have a lower interest rate. The penalty for breaking a closed mortgage is the Interest Rate Differential, or three months’ interest, based on your current mortgage balance, whichever is higher.

MORTGAGES ,WHAT YOU NEED TO KNOW?
MORTGAGE BASICS
VARIABLE VS. FIXED
Variable rate mortgages are attached to the prime rate and can change over time. The upside of this risk is that variable rates are typically lower than fixed rates.

How do you decide?

If your financial snapshot shows that you could handle an interest rate hike over time, then variable is probably the way to go. But if you’re on a tight budget or looking for a home at your max budget, then a fixed rate is the safer option.