Okay, so you want to buy a piece of Augusta or Acton Ontario real estate property but you don't have enough money saved up to buy one outright. Don't worry because a lot of prospective home buyers find themselves in that exact situation everyday. In fact, buying a home outright is something only a minority of people can afford to do.
So, if you find yourself in the 99% group you're more than likely going to need to apply for a mortgage to help you buy that dream home once you're done browsing the real estate listings in Oakville or Augusta. When it comes to mortgages you will be looking at two types of main mortgage types: fixed rate mortgage and variable rate mortgages.
In simple terms, fixed rate Augusta or Toronto mortgages will have you making the same mortgage payments every month for the duration of your mortgage term. There are no surprise changes to your payment, as you will be making mortgage payments based on a never-changing interest rate. Variable rate mortgages on the other hand fall on the opposite end of the mortgage spectrum.
Any mortgage broker in Burlington or August will tell you that variable rate mortgages, which can fluctuate from month to month based on the interest index rate, are only for those willing to take risks. With a variable rate mortgage you might pay less during the beginning of your mortgage term but the interest rate could go up at any moment, forcing you to pay more than you were getting used to paying without warning.
The benefit of going with a variable rate mortgage is that if the market and interest rate are in your favor you won't be paying a whole lot up front and can potentially pay off your loan quicker. The flip side to that scenario is that you might be faced with the possibility of the interest rate on your mortgage shooting up unexpectedly and leaving you to scramble to find a way to make your mortgage payments on time if you didn't prepare for such a scenario.
In the end the most important question you need to be asking yourself when faced with choosing between fixed home mortgage in Canada or the United States rates or variable mortgage rates is how big of a risk-taker are you? The answer you come up with will tell you all you need to know about what you think of mortgages.