If you’re planning to buy a home in Canada, you’ll likely need a mortgage. With so many types of mortgages available, it can be challenging to choose the right one. The most common type of mortgage in Canada is the 5-year-fixed-rate mortgage, where the interest rate remains the same for five years. 
The 5-year variable-rate mortgage is also popular, with interest rates linked to the Bank of Canada’s policy rate. In Canada, the difference between variable and fixed rates, depends on the bond market, and variable rates may be cheaper in certain market conditions. Other fixed-rate mortgage options are available for one to four years, which may offer better rates.
Home Equity Lines of Credit
Home Equity Lines of Credit (HELOC) is another option. HELOC’s are common in Canada and have variable interest rates and no term or amorization. HELOC’s can be a good way to access home equity, but they have a 65% loan-to-value ratio and are not eligible for insurance, making them riskier.
When housing & mortgage problems arise in Canada
Canadian mortgage and housing problems can arise when interest rates increase, as the market is hit faster and harder than the US market, especially if many borrowers have variable-rate mortgages. In such cases, borrowers should communicate with their lenders and consider refinancing or switching to a fixed-rate mortgage.
Conclusion: Choosing the right mortgage for your needs
It’s essential to research and compare the mortgage rates and terms before making a decision. Choosing the right mortgage is a significant financial commitment, so it’s crucial to make an informed decision. Client First Mortgage Solutions is here to help with any of your mortgage questions. Click the link to see what services we provide.
Original article: www.wolfstreet.com
