Concentra Bank will be closed on September 30 for the National Day for Truth and Reconciliation. Read More

Please note that Concentra Bank and Concentra Trust will be closed on Thursday, September 30 for the National Day for Truth and Reconciliation, a day to commemorate the tragic legacy of residential schools in Canada. The National Day for Truth and Reconciliation will be observed as a statutory holiday for employees in federally regulated workplaces, which applies to Concentra.

We will reopen on Friday, October 1, 2021.

Selecting a mortgage type that works for you
November 30, 2020

Selecting a mortgage type that works for you

Canadians are on the move. Following a sluggish start to the spring market, sales figures for Canada’s major real estate markets indicate buyers and sellers are highly motivated. Nationally, home sales are up by more than 30 per cent with hot markets like Vancouver up 56 per cent and Toronto up by 42 per cent.

As more Canadians work from home, many are assessing the square footage of their living spaces and urban locations. Whether its additional space for a home office or a single-family home without shared common areas, property buyers are house hunting.

If you’re thinking about buying your first home, moving up the property ladder or renewing your existing mortgage, make sure you select a mortgage type that works for you.

Implications of breaking a mortgage contract

Buyers with existing mortgage holders seeking to break their mortgage contract should understand their options. Depending upon the type of mortgage you initially selected, breaking your mortgage contract means penalties and the amount of penalty depends upon your mortgage type.

Breaking a variable rate mortgage typically means a penalty equal to three months’ interest; however, some low interest rate no-frills mortgages may incur up to three per cent of the principle or six months of interest.

With a fixed rate loan, your penalty is generally the greater of either three months’ interest or the interest rate differential (IRD), a formula used to calculate the difference between your calculated rate and the lender’s current rate that most closely matches the time remaining on your mortgage term.

Select your mortgage type carefully

Knowing and understanding your home ownership goals will help you select the mortgage that works for you. If you’d like more flexibility in a mortgage and aren’t concerned about interest rate fluctuations, you may want to consider a variable-rate mortgage. Speak to one of our Mobile Mortgage Specialists to determine what’s right for you.

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