Open vs Closed
An open mortgage usually has a higher interest rate than a closed mortgage, because it allows you the freedom and flexibility to pay off some or all of the mortgage at any time without the usual penalty.
A closed mortgage will have a lower interest rate than an open mortgage. Also, the amount of extra payments you can make without penalty is determined by your pre-payment privileges. If you pay more than is allowed, there will be a penalty applied. If you pay out the mortgage in full, whether to sell the property or refinance with another lender, most lenders will collect a fee of either three months interest, or charge the lost interest they would have collected until the end of the term.
Let's discuss which option makes the most sense for you!
Fixed Rate Mortgage
The main advantage of a fixed rate mortgage is the security that comes with having the same rate, and therefore the same payments, for the entire length of your mortgage term. The length of term varies by lender, but are in the range of 6 months to 10 years.
Variable Rate Mortgage
A variable rate is tied to the Bank of Canada prime rate. As the prime rate goes up or down, your interest rate and payments are adjusted accordingly.
Private Lending Solutions
As an alternative to the conventional mortgage, I also have access to several Private Lenders. I can help you with all of your different lending needs, investments, rentals, and home ownership. Whether it's to close a quick deal, build a home, or flip a home, I have Private Lenders ready to review your deal.
Our office has its very own Commercial Division comprised of brokers with years of experience dealing in this field. I partner with them to ensure a smooth process for you from application through to completion. You'll have a whole team working for you.