Part 2: 123’s of Mortgage Terms – let’s get into it!

April 3, 2018

There are a number of choices when it comes to mortgages – some would argue too many!  As such, it can get really confusing when you are looking to find a mortgage for the first time or to port your current mortgage to a new property.  We understand and are here to help.

As real estate experts, we are here to help you find a solution that works best for your long-term real estate goals.  Let’s review some of the most FAQs: 

Q: What are the conditions when it comes to porting a mortgage?

To avoid penalties, most lenders allow the borrower to port their mortgage to their next property.  This means you will essentially continue the mortgage terms you agreed to for the property you are selling and simply port those same terms to the new property.  When you are setting up a mortgage, ask the lender if porting the mortgage is a penalty-free option they provide to give you the freedom to move before your current mortgage is due for renewal.

Q: Can I break a mortgage before the terms are up?

If you need to break a mortgage before the terms are up, the rules vary based on fixed or variable mortgage agreements.  In a fixed scenario, the penalty to break the mortgage is significantly higher than a variable mortgage.  A variable mortgage requires, on average, a three-month interest rate payment (according to the specific terms of your mortgage) to end the agreement. It is a good idea to check these terms before you sign a longer term, such as 5+ years, as your life circumstances may change over the 5 years.

Q: In the current market is fixed variable a better option?

Whether fixed or variable is best for you is based on your long-term goals.  If you begin the life of your mortgage with a variable rate, and the interest rates are increasing at a faster pace than you are comfortable with, you can switch your terms (with most lenders) to a fixed rate (based on the rate quoted) for the remainder of the term without penalty.  If you are comfortable with the variable rate when you enter into the mortgage agreement it provides the most flexibility if/when you need to alter the terms for any reason.

As we review your needs and wants for a property we can also take a look at which mortgage rates will be best for you.  We have a team of experts that can help you find the perfect terms to fit your needs so you have the flexibility you will need moving forward.  If you have any questions at any time we are here to help.

Shirriff Wells is a full-service real estate team that is here to help you with all of your mortgage questions.  We specialize in buying and selling real estate in Toronto North, Aurora and Newmarket area.  Contact us today at  Follow us on Twitter, Instagram and Facebook under Shirriff Wells for daily updates – see you there!