| There are several kinds of mortgages: | | | | of the market value of the property) then the |
| - Assured | | | | mortgage must be insured and a premium is added to |
| - Conventional | | | | the mortgage. |
| - Floating rate | | | | Because it is CMHC or Gentworth which insures loans, |
| - Fixed rate, open or closed | | | | they must give their approval before the mortgage |
| The above main categories cover hundreds, if not | | | | can be approved. |
| thousands of mortgage products available from | | | | Generally, a loan fits securely in one or two categories |
| different lenders. Choosing the right mortgage can be | | | | Rates closed: |
| very daunting for the new home buyer. However, | | | | This is a loan whose rate remains the same |
| below is just a selection of the commonly available | | | | throughout the duration of the term. Upon renewal, a |
| mortgage categories available on the market. Although | | | | new rate is determined for the mortgage and the new |
| mortgage types shown below are just an outline of | | | | option taken.. |
| the many products available out there, further study | | | | Variable rates: |
| and research into the mortgage market is highly | | | | This is a loan rate that is based on the prime rate of |
| recommended. | | | | the national bank. Payments of a variable rate |
| Conventional Mortgage: | | | | mortgage fluctuate when the national bank of a |
| This is a mortgage with a Loan to Value that is less | | | | country decides to change the prime or base interest |
| than or equal to 75% of the market value of the | | | | rate. |
| property. This means that the mortgage does not | | | | These are the main types of loans. However, there |
| need to be insured by CMHC and no premium is | | | | are many more loans that are designed for more |
| added to the loan amount. | | | | specific situations such as first mortgages and junior, to |
| Insured mortgage: | | | | make the self-construction for self-employed |
| If the Loan to Value exceeds 75% of the market | | | | borrowers. |
| value of the property (and it may even go up to 100% | | | | |