Fixed Rate Mortgage

Fixed Rate Mortgages are nothing new. They are probably one of the most basic, best understood and most widely used mortgage loan products in the current Canadian mortgage marketplace. During the recession that swept through the entire banking system back in 2008 and 2009, fixed mortgage rates were one of the very few saving graces.

Fixed Rate Mortgages are one of the safest investments from a bankers perspective and one of the simplest loan products from a borrowers perspective. A Fixed Rate Mortgage is, very simply: a mortgage loan that is provided by a lender to a borrower at a fixed price over a set term or period of time. Payments do not change during the term and the payments are typically a blend of interest and principal.

DID YOU KNOW: The 5 year fixed rate mortgage is the gold standard of the mortgage industry. Not only is it the most popular product, it's the product that all industry professionals compare their own offerings to. Lenders consider fixed rate mortgages some of their safest investments, and so they offer some of the most generous options on these products.

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Most common Fixed Rate Mortgages are 5 years in length. This seems to be the average time a homeowner either, stays in their home or wants to be locked into a fixed rate term. Some homeowners may opt for a longer term but most Canadians want to have the flexibility after 5 years to make another choice. Fixed Rate Mortgages range in terms from 1 year to 25 years. Fixed rates are renewable after the term is up, most fixed rate mortgages can be refinanced at anytime to add in other debts, most fixed rate mortgages offer the best overall terms and conditions in the marketplace and most fixed rate mortgages can be ported to a new property.

Even though a Fixed Rate Mortgage is basic, there are still a lot of them available from many different suppliers and sources. Having a competent, licensed Mortgage Broker on your side will be vital when it comes to choosing the right Fixed Rate Mortgage for you.

Fixed Rate Mortgages at a glance

The simplest, most universally understood mortgage product available on the market
The mortgage rate and payment amounts stay stable for the entire term of the mortgage
The most common fixed rate mortgage term is 5 years.

PROS:

Easy to budget around because the payment amounts do not change through the entire term.
Security in knowing you're insulated from rate fluctuations in the market.
Fixed rate mortgages generally offer the best Terms and Conditions on the market. (Lump sum payments and other options)

CONS:

Fixed rate mortgage products generally have higher rates than variable and adjustable rate mortgages.
Even if rates on the market start on a downward trend, your interest rate stays unchanged.
You can break the term to refinance, but doing so typically incurs a penalty.

Alberta Equity has helped over 50,000 people find and qualify for the best mortgages in Canada for over ten years. We do all of the heavy lifting and ensure that you get the best mortgage rates and product features available. Apply online for a free, no obligation consultation.

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