Andre Glockl - BC Mortgage Rates - products

By: Hmc Home Mortgage Canada  09-12-2011
Keywords: Mortgage

Fixed Rate Mortgage

A Fixed rate mortgage is a type of mortgage where you have a fixed interest rate and therefore a "fixed" payment amount. This means that your interest rate is not subject to change and the rate at which you pay back your loan is always the same. There are some key advantages to having a fixed rate when you consider the nature of the inflation rate. The value of your home should continue to increase year to year while the buying power of money decreases. In this way the rate of inflation will continue to increase over the actual fixed interest that you are paying on your loan.

A Fixed mortgage product will also be "open" or "closed". In either case your loan will have a set term. It will likely be between six months and five years. If your term is Open then you can payout the amount in full at anytime without penalty or further interest charges. If, however, your term is Closed then you will be subject to an early payout penalty or interest differential charge.

Variable / Adjustable

An adjustable rate mortgage (ARM) or variable rate mortgage is a mortgage where the interest rate is subject to change. Most of these products are based on a formula using the prime interest rate less a factor. For example, if you choose an ARM with a rate of Prime - 0.5% then your rate would be calculated at any given time using this formula. If prime were 4% then the interest rate on your mortgage would be 3.5% or if prime were 6% then the interest rate on your mortgage would be 5.5% and so on.

These types of products have been very popular lately as prime interest has remained relatively low. There is also an option with this type of mortgage to lock in to a 3 year or 5 year "fixed" term at any time. For more detailed information on this type of mortgage.

Keywords: Mortgage

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Andre Glockl - BC Mortgage Rates - services

I survey numerous Banks, Trust Companies, Credit Unions, and even private lenders for the best rates. I will give you straight forward advice, while looking out for YOUR best interest. I am an independent professional who knows the mortgage business. Would you like to make an informed decision.