What are the options for mortgages when it comes to short term rates vs. long term rates?

Many information is posted on my site at http://www.mohanrammphal.com check it out or call me at 647-638-5873

The best is to make an appointment with a Mortgage Broker, or you can call myself at 647-209-3511 for an appointment and I can provide you with all information needed.

General Motgage Options include the term length, open or closed (prepayment options), fixed or variable or the lesser known blending of fixed AND variable. Less frequent options include Cash Back, Home Equity Line of Credit.

To answer the question more specifically, short term money (rates) is currently cheaper than long term money, thus if you want to fix a rate for a long period of time, then you are 'paying' for this security from rising rates.

Contact me at todd@mrloft.ca and I'll connect you to a Mortgage Manager that has incrediblly competitive rates and who can explain all you options.

Sept 12/2010

Rates are very close to the all-time low and will be low for 6-12 months before creeping up very slowly

NB Bank Prime s/be 4%+ CPI inflation

Take a variable prime less 0.5% to 0.9%

Take a 25 yr ammortization but make payment equal to what you would have been paying on a 5yr fixed.

You'll be amazed in 3yrs when you see how far ahead you'll be in principal repayments

There are many different mortgage options available to you. When it comes to choosing the right mortgage term and payment options, you need to assess the risk involved in each of them. You should carefully consider the loan offers that you receive. You should determine how much you can afford monthly, while including the cost of your taxes and insurance as well.

1. Mortgage Options: Fixed Rate Mortgage
The best mortgage option is a fixed rate mortgage. This option locks in a set interest rate, which means your rate cannot go up. You can always refinance if the interest rates drop, but you will not have to worry about your payment going up. You are protecting yourself from your payment rising when you choose a fixed rate mortgage.

2. Mortgage Options: Adjustable Rate Mortgage
Another mortgage option is an adjustable rate mortgage (ARM). This mortgage offers a lower initial interest rate, which means lower initial payments. However the ARM will adjust after the initial payment option is over. Whenever the interest raises so will your payment. It is important to realize that you will need to make more money to be able to continue to afford the loan.

3. Mortgage Options: Interest Only Payments
Interest only payments are another option when it comes to your mortgage payments. This option will lower your payment amount, and add greater flexibility to your payment options. However, you do not build equity with this option, and you may find yourself in a difficult situation once the interest only payment option runs out. You should be very careful when it comes to an interest only loan.

4. Mortgage Options: Private Mortgage Insurance
Private mortgage insurance is required if you do not put down twenty percent on your home. Private mortgage insurance protects the lender, in the event you default on your loan. You can avoid private mortgage insurance through creative financing. By doing this you take out a second loan to cover the other twenty percent of the loan. The interest rate on your second loan is usually higher.

For a free consultation I can refer you to a number of mortgage brokers.

RBC has done a great job on their website explaining everything about mortgages.

http://www.rbcroyalbank.com/products/mortgages/understanding-mortgage-basics.html

I can get you in touch with a specialist if you need

Call Brad Vokins mobile mortgage special from Royal Bank
289-385-0406

Choosing the RIGHT Financing Option:
Variable Rate; Adjustable Rate; Fixed Rate; Line of Credit; Combo Fixed Rate / Line Of Credit;
http://www.domusfinancial.com/refinance-debt-consolidation/choosing-the-right-financing-option

Gerry,

Options for mortgage terms generally range from 1 to 10 years in Canada.

Short term rates are almost always lower than longer term rates. For example the 1yr fixed is available at under 3% while the 5yr is closer to 4% and the 10 year is closer to 5%.

The best route to take is to contact a mortgage broker. I can refer you to a few mortgage brokers. Visit the link below for my contact information:

http://shawnmangha.com/4a_about_me.php