Understanding Mortgages

There are a lot of different options you have when looking for the right mortgage, especially for 1st Time Home Buyers. We’ll work with you to help find the best mortgage for your lifestyle. You make it your mortgage by selecting the terms best suited to your needs.

Option 1: Fixed vs. Variable Mortgages


With this option, home buyers have a set interest rate that stays the same, or is fixed, at this price for the term of the mortgage. Its low risk and you’ll know exactly how much you’ll be paying per month.


With variable, the interest rate you pay will fluctuate with the Prime Rate set by the Bank of Canada.

Often variable rates are lower than fixed rates, but do have a higher risk as the prime rates have the possibility to increase.

Variable rate mortgages are locked in for a 3 year minimum so you also know exactly how much you’ll be paying per month..  

Option 2: Open-Term vs. Closed-Term


If a mortgage is open, it means you can make payments ahead of schedule or pay the entire balance off in full at anytime, without penalty. However, open mortgages are subject to higher interest rates.

If you’re thinking about selling your home, it’s a good option to avoid paying penalties later.


Closed-term mortgages have less flexibility and a much lower interest rate.

Closed-term options are beneficial for those who wish to make consistent and lower interest mortgage payments throughout the term of their mortgage.

At 1st Choice, we have a 20/20 option that allows you to pay up to 20% of the mortgage principal per year, in addition to scheduled payments. You can also increase your scheduled payments by 20% with no penalty.


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