It's important for you to be familiar with mortgage terms and conditions in order for you to determine which mortgage is right for you.
Here’s all the common mortgage terms and conditions that you should be aware of prior to buying your home:
Before you buy
Before you even start searching for a home, you must look for a lender to help you determine the maximum mortgage amount you can afford to pay, as well as your monthly mortgage payments.
Visit our “Mortgage Pre Approval” article to learn about this step.
Selecting a mortgage
Amortization period is the amount of time that you have to fully pay off your mortgage. Depending on your financial situation, you and your mortgage broker should be able to determine the time you need to fully pay off your mortgage. The most common mortgage amortization period is 25 years.
This is the length of time you’ve locked in your rate and terms and conditions. In Canada, the most common mortgage term is a 5-year fixed rate.
Pre payment options allow you to either increase your monthly mortgage payments, or put an additional sum of money towards the principal mortgage. This is usually done by young home buyers, since their income is likely to increase going further. As such, this is a way for you to pay off your mortgage faster. Most mortgages in Ontario allow for pre-payment up to 10% of the total mortgage amount per year.
We recommend you discuss the details of your mortgage terms with your mortgage broker when comparing different mortgage products as they may affect your monthly payments and your financial planning.