Most homes are financed with a mortgage. A mortgage is an advance of money from a lender that will cover the finances of your new home. Over an extended period of time, you (the mortgagee) must pay back, in increments, a percentage of the money lent to you, plus interest, until the total sum, is paid in full.
The type of mortgage you decide on is usually based on the current interest rate and the length of time you have to repay the lender. The interest rate is the percentage of the loan the lender ears for lending you money. Commonly, mortgages are Fixed Rate or Adjustable.
Fixed Rate Mortgages are mortgages where the rate of interest is fixed for a specific period of time.
Variable Rate Mortgages are mortgages that have fixed payments, but the interest payments fluctuate with any changes in interest rates.
The Mortgage Rate Calculator can help you determine the possible size and payments of your mortgage.
For more information on the financing process and the types of mortgages available, speak to one of Terrequity’s helpful Royal Bank Mortgage Managers.