Mortgage Broker Calgary Blog

Provided you ask the right questions of your local mortgage broker, they can help you find a home you can see yourself living in, at a price you can actually afford.

If you’re seeking to move home or buy your first property in Calgary, working with a mortgage broker is strongly recommended, and once you’ve found one you can trust and communicate well with, begin by asking them the following four questions:

1. How long is my term to maturity?

Structured in increments, Canadian mortgages can take 30 years to pay off in full, but the payments are calculated against shorter terms that last between 1 and 10 years; the length of time depends purely on your preference. However, the majority of Canadians select terms that are between 2 and 5 years in duration, and mainly because they offer more flexibility and value.

For the duration of these terms, you must maintain recurring payments until your mortgage matures, and then you can choose from the options below:

• - Enter a new term, at a new rate, with your existing financial institution
• - Choose a different financial institution and renew your mortgage with them
• - Negotiate the sale of your current home and move its mortgage to another property you have just purchased, or plan to purchase
• - Pay whatever is left on your mortgage in full, and end all payments

The kind of mortgage term that’s maturing will form part of the reason for your choice from the options above.

2. Should I choose an open or closed mortgage?

Mortgages with an open term do charge you at a higher rate of interest, but they will also permit you to prepay without charging you a penalty. Closed term mortgages on the other hand, do give you a lower rate of interest, but afford you less flexibility and demand a greater commitment from you.

3. Should I choose a fixed or variable rate mortgage?

Mortgages in Canada can be divided into two categories, as shown below:

• - Fixed rate: for the duration of the term, fixed rate mortgages charge a set interest rate
• - Variable rate: the interest rate can go up or down according to market conditions with variable rate mortgages, although you pay the same recurring payment for the length of the term. Should the interest rate rise, a larger proportion of your recurring payment will go towards the principal on the loan, whereas when the rate goes up, less of your recurring payment goes towards the principal.
4. Can you help me get the best mortgage?

Provided you choose a reputable mortgage broker with strong knowledge of the local market and lenders, they should be able to set you up with a mortgage that is the perfect fit for your exact circumstances, both personal and financial. They’re not tied to any financial institution, and will give you unbiased and honest advice and guidance.

To simplify the mortgage process and make sure you’re getting the best interest rates and terms, always try to work with an experienced mortgage broker from the outset – and don’t forget to ask them the questions listed above.

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