| Rate hold:
Rate hold
The rate hold is the time period, between 30-120 days, before your mortgage renewal date you are able to lock in the current mortgage rate. If rates go down further within this period, however, many lenders will honour the lower rate.
|
120 days |
| Prepayment options:
Prepayment options
Prepayment options outline the flexibility you have to increase your monthly mortgage payments or make a lump sum outlay against your mortgage as a whole. According to the Canadian Association of Accredited Mortgage Professionals (CAAMP), 28% of mortgage holders used one or both prepayment privileges in 2010.
|
| Increase Monthly Payment by:
Increase Monthly Payment by
The monthly mortgage payment is calculated based on the mortgage amount, amortization period and the associated mortgage rate. A general affordability rule is that your monthly housing costs should not exceed 32% of your gross household monthly income.
|
10% |
| Lump Sum:
Lump Sum
Lenders allow you to put a lump sum payment against your mortgage each year ranging from 0%-25%. A 25% lump sum prepayment privilege would allow you pay your mortgage off completely in 4 years.
|
10% |
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