There are different types of mortgage loans that are available to potential and current homeowners, which may have unique features, such as:
Closed mortgages – Mortgages that cannot be terminated and the loan repaid before maturity of the contract. Mortgages that apply to residential properties may be repaid, subject to payment of a bonus to the mortgagee for terminating the contract.
Open mortgages – Mortgages that may be terminated without payment of a bonus to the mortgagee.
Fixed-rate mortgages – Mortgages for which the interest rate for the loans that they secure remains the same throughout the term of the contract.
Amortized mortgages – Mortgages by which the principal sum of a loan decreases over the term of the contract. Amortized mortgage loans are repaid in payments that include both principal reduction of the loan and the interest that is required to be paid for borrowing the loan. These instalment payments are the same during the term of the loan. At each consecutive payment a greater portion of the total payment is paid towards the reduction of principal and less is paid towards the interest.
Interest-only mortgages – Mortgages for which the instalment payments are only interest, and the mortgagor owes the same money at maturity of the mortgage that was initially borrowed.
Variable-rate mortgages – Mortgages that are amortized and for which the interest rate may fluctuate during the term because it has been pegged to rise or fall with the commercial banks’ prime lending rate, which is referred to as “Prime”. The instalment payment for variable-rate mortgages remains constant unless a negative amortization occurs.
Adjustable-rate mortgages – Mortgages that are amortized and for which the interest rate may fluctuate during the term, because it has been pegged to rise or fall with Prime. The instalment payment for adjustable-rate mortgages changes whenever the interest rate changes.
All of these types of mortgage loans are available from Domus Financial Corporation. Domus’ management team consults with you regarding which type of mortgage loan best suits you and your unique circumstances.