Types of Mortgages in Canada
Information Center - Financing
Written by Anthony Reyes   

The more we progress into the 21st century the more we see Canadian mortgages become more complicated.  However, with everything that keeps constantly changing the banks remain the same when it comes to dealing with the mortgage system.

One type of mortgage in Canada is a Variable-Rate Mortgage that is offered at 0.25%.  It can be adjusted monthly due to the constant fluctuation of the market.  This is the difference between a fixed payment and variable payment.  With a fixed mortgage you are locked in for a minimum of five years and this doesn’t change throughout that term.

Fixed rate mortgage in Canada will let you finance up to 75% of the property value and is really the most conventional mortgage that is available.  Due to the system being so flexible you are able to choose different amortization terms and periods.

Another mortgage is what is known as a Capped Rate Mortgage and this offers you a short term and lower rate that is combined with long term security.  However, the interest rate is variable and adjusted every month in accordance with prime rates.  This means that if the rates are up at the time of the next rate adjustment you are never going to pay more than your initial capped rate.  This is really the best option because the maximal rate is deciphered figuring on the 5 year term that is established.  Again this means that you will always get the best rate whether prime or capped. 

The Money saver mortgage in Canada is used when the priority is given to a lower rate mortgage.  This means that the mortgage rates and payments are going to be adjusted every three months in accordance to the constant fluctuation of interest rates.  A 5 year term loan that is given a variable interest rate stemmed from a 3 month term rate reduced to .35% is going to be adjusted to give you the best rate possible in that three month term.

The main factor in the housing market in Canada is known as the Canada Mortgage and Housing Corporation and they promote low cost mortgages for Canadians.  They also ensure low cost insurance for the lenders as a safety measure.  They have been in business since 1954 and prove to be the number one go to government agency in all of Canada when it comes to questioning the housing market.