Mortgage Terms

As a professional mortgage broker, structuring your mortgage terms to best suit your financial needs is a priority for me. Every mortgage application is unique and I can find the lender that wants your business on your terms.

When we work together, I will always do my best to make sure you and your family understand the mortgage terminology that is used in the industry. 

Mortgage Calculators

Use these tools to determine if you finances are going to meet your future goals.
Mortgage Calculator Use this calculator to generate an amortization schedule for your mortgage. Quickly see how much various loan amounts will cost you monthly.
Mortgage Payoff Calculator How much interest can you save by increasing your mortgage payment? This financial calculator helps you find out.
Compare Mortgages Calculator Determining which mortgage provides you with the best value involves more than simply comparing monthly payments. Use this calculator to sort through the monthly payments, fees and other costs associated with getting a mortgage.
Mortgage Refinance Calculator How much interest can you save if you refinance your mortgage? This calculator helps you find out! Enter the specifics about your current mortgage, along with new loan amortization, rate and closing costs. We will then determine how much interest refinancing can save you.
Mortgage Qualifier  The first steps in buying a house are ensuring you can afford to pay at least 5% of the purchase price of the home as a down payment and determining your budget. This calculator steps you through the process of finding out how much you can borrow.
Rent vs Buy  Should you rent or should you buy your home? It takes more than looking at your mortgage payment to answer this question.

If you would prefer to go over your finances together, I would be happy to book an appointment with you.

Mortgage rates

Period Interest Rate
CLOSED RATES
6 Months 3.34 %
1 Year 3.14 %
2 Years 3.14 %
3 Years 2.92 %
4 Years 3.14 %
5 Years 2.97 %
7 Years 4.24 %
10 Years 4.39 %
OPEN RATES
ARM/VRM P+/- 0 %
6 Months 6.7 %
1 Year 4.45 %
 

Call me for today’s unpublished rate specials!

Mortgage Application PDF
Online Mortgage Application

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Conventional Mortgage

A conventional mortgage is a loan for no more than 80% of the purchase price (or appraised value) of the property. The remaining amount required for a purchase (20%) comes from your resources and is referred to as the down payment. A bank or lender will offer you a conventional mortgage if you have 20% or more to put down on the property.  With this type of mortgage you are not required to purchase CMHC insurance, thus lowering your monthly payments.

Example: If you’re buying a house in Langley for $350,000 then you’ll need a $70,000 down payment to qualify for a conventional mortgage.

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High Ratio (aka: High Loan-to-Value Mortgage)

This type of mortgage allows you to borrow more than 80% of the property’s purchase price (or the appraised value, whichever is less). However, to take advantage of this option you will need to pay for mortgage loan default insurance. This insurance is actually legally required by your lender, but the lender passes on the cost to you.

The more you put toward your down payment, the less you’ll be charged. Calculating your particular mortgage default insurance can be done using the following figures:

  • 5% – 9.99% down payment: 4.00%
  • 10% – 14.99% down payment: 3.10%
  • 15% – 19.99% down payment: 2.80%

Example: If you’re putting a 10% down payment on a $600,000 home purchase ($60,000), you’ll have a mortgage of $540,000. Based on a 3.10% mortgage default insurance rate (since you fall within the 10% – 14.99% category), your insurance premium would be $16,740 ($540,000 x 3.10%). This amount would then be added to your mortgage amount, which means you’d have a total mortgage amount of $556,740. Mortgage default insurance is repaid over the life of the mortgage.

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Fixed Rate Mortgage

A fixed mortgage offers you the security of locking in your interest rate for the term of your mortgage, so you know exactly how much principal and interest you will be paying on the mortgage during the term. Terms range from 6 months to 10 years. The benefit of this mortgage is the rate is lower than an open mortgage, making it a more popular option if you have no plans to pre-pay it in full during the term you select.

Example:  Fixed rate mortgages offer some form of pre-payment, from 10% to 25% of the original mortgage balance each year, depending on the lender. If you wish to pay off your mortgage in full, there will be a penalty of either 3 months simple interest, or an Interest Rate Differential (IRD).

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Variable Rate Mortgage

A variable-rate mortgage allows you to take advantage of today’s low Prime Rate. Most variable rate products are set below prime, terms range from 1 to 5 years. Payments vary depending on the product or lender you choose. In some cases you can fix your payments for up to 5 years, but the interest rate will fluctuate as the Bank Prime Rate changes. In other cases your monthly payments will fluctuate depending on how many times the Prime Rate changes during your term.

Example: Even though this option usually provides for a lower interest rate overall, borrowers must have the cash flow to handle a fluctuating payment.

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Insured vs. Insurable vs. Uninsurable

These terms will come up again and again, and it’s important to understand which category you belong to.

Insured Mortgages

The mortgage lender is protected from the applicant defaulting on the mortgage because the applicant pays for insurance as part of the lending terms.  

Example: High Ratio mortgages are legally required to be insured and that cost is passed on to the applicant.  The insurance and mortgage are bundled into one larger payment.

Insurable Mortgages

The mortgage is “stress tested” at a higher amount than the borrower would be paying to ensure borrowers can afford their mortgage if the rates raise.

Example: Lenders may choose to pay for mortgage default insurance on mortgages where the borrower has more than 20% down payment. This insurance protects the lenders from a loss.

Uninsurable Mortgages include:

  • Refinancing (you want to pull some of the equity out of your property)
  • Mortgage on rental properties
  • Mortgages approved at 30 years amortization
  • Properties worth over a $1 million

The Government is intentionally passing on the risk to lenders by implementing stricter insurance qualifying guidelines and limiting mortgages that can be insured to what they consider lower risk.

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Jaret really worked hard to present our story to a lender and get us approved. Coming to our house was also very convenient as we have young children.

Cindy and Joel

I took Jaret’s advice to let him look into a better renewal rate than the one that was automatically mailed to me by my lender. He found a better offer, and I’m much happier.

M. Long

Thank you for helping me get into my first investment rental property.

Trevor

GET IN TOUCH

I would love to hear from you! Let me know what what services you are interested in or if you just want to have a chat about your current financial circumstances. I’m here to listen and then give you my professional feedback.

If you have any immediate questions about my services, feel free to give me a call at 604-816-5988 or send me an email! Prefer to schedule a call ? Add yourself to my calendar on a date and time that works best for you.

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