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All mortgages in Toronto can be separated into two categories: 
conventional mortgages and high-ratio mortgages. Conventional loans are 
for less than 80 per cent of the home’s value, explains Willy Mahailet mortgage broker in Toronto, in this quick article.
Comparing Mortgage Types Available In Toronto – Willy Mahailet Mortgage
Mortgages that cover more than 80 per cent of a home’s value are 
called high-ratio mortgages. These are also known as National Housing 
Act mortgages, because the act made this type of loan possible. Before 
the act was passed, lenders could easily lose money on this type of 
loan. Today, lenders are protected in high-ratio mortgages, because 
borrowers are required to purchase mortgage loan insurance to protect 
the lender from a loss.
Both conventional and high-ratio home loans are offered with variable
or fixed interest rates. A fixed rate loan has the same interest rate 
for the term of the loan. The most popular term for fixed-rate loans in 
Toronto is five years. While these mortgages usually have a higher 
interest rate than variable loans, they provide security and financial 
assurance that is not available in a variable loan. Brokers such as 
Willy Mahailet at Mortgage Alliance Company of Canada in Toronto help you 
compare rates to find a fixed-rate loan with an affordable rate.
A variable rate mortgage has an interest rate based on the lender’s 
current prime rate, meaning it can vary from month to month. Although 
the interest rates for these loans are usually lower and most people 
save money over the term of the loan, sometimes this variance can be 
hundreds of dollars from one month to the next. For people on a budget 
or those who like to plan financially, this can be stressful.
As
a further distinction, loans can be either open or closed. This refers 
to the level of flexibility of the loan. An open mortgage allows you to 
make changes without penalty. This includes paying off the loan early, 
refinancing or changing the term. A closed mortgage usually has a lower 
interest rate but charges hefty fees for changes before the mortgage 
matures. Your mortgage broker will help you weigh the pros and cons of a
closed loan, and decide if you should opt for the lower interest rate 
option.
It is not always easy to determine which type of mortgage is best for
your needs. If you are looking for a mortgage broker in Toronto, 
Willy Mahailet mortgage broker at Mortgage Alliance Company of Canada can help 
you find the home loan that works best for you.
Check out this site for mortgage info recommended by Willy Mahailet mortgage broker in Toronto, ON.
Here’s a great video about mortgage basics in Toronto
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