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Mortgages

 
 

Mortgage Options

Mortgages come with a variety of different features and characteristics, giving you the flexibility to customize your mortgage to suit your needs.

An RBC Mortgage Specialist will help you determine the type of mortgage that works best for you. Here are some of the options you will need to consider.

Amortization is the amount of time needed to reduce the loan to $0. A conventional mortgage is 25 years, but amortization can range anywhere from five to 35 years. The shorter the amortization, the higher your regular payments will be, but the less you’ll pay in interest over the life of the loan. Generally, amortization is several mortgage term periods.

The mortgage term is the period of time that the mortgage agreement is in effect. These typically run from six months to 10 years. At the end of the term, you will either repay the full mortgage amount, or renegotiate a new mortgage. Depending on the length of your mortgage terms, you will likely go through three or four different term periods in order to amortize your mortgage fully.

You will need to decide whether you want an open mortgage or a closed one. An open mortgage lets you pay off some or all of the mortgage at any time without penalty. With a closed mortgage, the prepayment options are generally limited to a certain percentage of the mortgage amount each year, or increasing your payment amount up to a certain limit.

With a variable-rate mortgage, the interest rate changes as market interest rates change. With a fixed-rate mortgage, the interest rate is set for the length of the mortgage term. Variable rates are generally lower than fixed-rates for a mortgage of the same size and term, but if interest rates go up, so will your interest cost. Fixed rates, while slightly higher, offer security. Even if interest rates in general rise, your mortgage rate is locked in for the length of the term.

We also offer the innovative RateCapper® Mortgage — a variable-rate mortgage that establishes a maximum rate for the mortgage term, so if rates go above that amount, you are protected.

You can also choose the payment frequency. You can choose to make your mortgage payments monthly, semi-monthly (twice a month), bi-weekly (every two weeks) or weekly. Paying more frequently helps to reduce the mortgage principal more quickly.

How to get started

An RBC Mortgage Specialist can answer any of your mortgage questions, and can complete the pre-approval process with you. You can find one through our Mortgage Specialist Locator.

RBC Mortgage Specialists are mobile and will arrange to meet with you wherever it’s most convenient for you. If you feel more comfortable working in a language other than English or French, specify that you would like a RBC Mortgage Specialist who speaks your preferred language.

 

The content of this website is provided for the general guidance and benefit of our clients. This website is for informational purposes only and is not intended to provide specific advice. See full disclaimer.

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