There are some basic questions you need to ask when shopping for a new mortgage, such as, “What is the interest rate?” and “What will our payments be?” But to make a smart decision, there are other things you need to know too. According to the Financial Consumer Agency of Canada (www.fcac-acfc.gc.ca), you should also ask:
What is the amortization period?
This is how long it will take to pay off your mortgage. It is important because some lenders will extend the amortization period to offer you lower payments — which may not be in your long-term best interests.
What is the term?
This is the length of time your agreement with the lender will be in effect. Typical terms range from one to five years. There may be fees for making changes to, or getting out of, the mortgage during its term.
What are my options for making extra payments?
Most mortgage agreements have options for making extra payments to pay down the principal. You’ll want to know all of the options, and ensure they come with no extra fees or interest charges. If you need a mortgage advisor, we may be able to make a recommendation.