Fixed-Rate Mortgage in Ottawa
Borrowing Made Simple is making a name for itself as a Canadian leader in mortgage brokering. We provide first-time and veteran home buyers with a full spectrum of fixed-rate mortgage terms at the most competitive rates on the market.
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What Are Fixed-Rate Mortgages?
Fixed-rate mortgages are by and large the most popular mortgage type among borrowers. Their popularity is likely due to their stability—the rates in a fixed-rate mortgage are locked in until the end of the term.
Since fixed-rate mortgages are so in demand, they often come in a wide array of term lengths. You can find fixed-rate mortgages in 5-, 10-, 15-, 20-, and 30-year terms. Typically, a longer-term means a lower monthly payment, but a higher interest rate.
At Borrowing Made Simple, we take immense pride in the range of term lengths we can offer our clients. We source our products from multiple lenders and banks, meaning that when you come to us, you get to choose from a diverse collection of value-driven products.
How Do Fixed-Rate Mortgages Work?
Your monthly payment on a fixed-rate mortgage depends on your term length and the prime rate. Across the board, though, part of your monthly payment will go towards your interest debt, and the other part, called your principal, will go towards your equity.
The percentage of your payment that you contribute to principal and equity will vary over the lifespan of your mortgage, but your payment figure will always remain the same. These payments will continue until your mortgage is fully amortized, which simply means paid off in full.
What Drives Change in Fixed Mortgage Rates?
Ultimately, fixed-rate mortgage rates are predominantly influenced by bond yields. Lenders and banks use bond yields as a reference point to determine their lending interest rates. Put simply, when bond yields increase in Canada, you can expect fixed-rate mortgages to increase too. Conversely, when bond yields fall, so will fixed-rates.
What’s the Difference Between Fixed-Rate Mortgages and Variable Mortgages?
Fixed-rates are exactly as they sound: their rates are fixed in place at the time the contract is signed. A variable mortgage, on the other hand, is subject to fluctuate up or down with the market.
What Are the Pros and Cons of a Fixed-Rate Mortgage?
The biggest advantage of a fixed-rate mortgage is its predictability. With a constant, regular mortgage payment, homeowners can budget their finances easily. They’ll know precisely how much they must pay every month, and for how long. The disadvantage is that if the real estate market drops, homeowners are stuck paying for more than the current value of their home.
The static nature of fixed-rate mortgages makes it vital that applicants find the lowest rate mortgage they can. At Borrowing Made Simple, that’s precisely what we do for our clients.
Consult the World of Mortgages with Borrowing Made Simple
Our mortgage lenders are competent, strategic professionals. We draw from years of industry experience to develop customized loans to fit your budget and needs. Don’t get caught in a money trap. Let our consultants help you navigate the world of mortgages and save your hard-earned money.
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