True North Mortgage Rates | Open vs Closed Type, Which Is the Right for Your Needs?

July 2, 2021 | Editorial Team

True North Mortgage

Many people turn to their banks when it comes to buying real estate. Banks are one of the most reliable lenders, but they also tend to have the highest interest rates. Fortunately, there are other options. Notably, True North Mortgage. True North Mortgage is one of the leading mortgage brokers in Canada.

True North mortgage brokers have been helping Canadians find the best rate possible since 2006. As this broker only offers CMHC-insured mortgages in Canada, you’re in good hands. But you can’t go wrong if you also look at mortgage rates in other renowned companies such as TD Bank, Scotiabank, or CIBC. We also bring you the best mortgage deals in Ottawa and Calgary, too.

Now, let’s dive deeper into True North’s mortgages as well as information about mortgages in general, Canada!

True North Mortgage Rates – Frequently Asked Questions

Why Should I Compare Mortgage Rates?

As True North Mortgage offers such great rates in Canada, you may be wondering why you should bother comparing mortgage rates. This is because even if True North Mortgage offers a great interest rate, you may have different requirements. For example, you may want a longer-term mortgage or fewer penalties.

Although comparing all your mortgage options can be tedious, you will benefit by getting the best mortgage rates possible. Comparing Canadian mortgage rates also ensures you are well-informed of all your lending options.

Should I Get an Open or Closed Mortgage?

You may be confused about whether or not you should get an open or closed mortgage, especially since True North Mortgage offers both. Truthfully, both types have benefits and downfalls. If you aren’t sure, talking to the mortgage specialists at True North Mortgage should help. For now, let’s take a closer look at both types to see which one will suit your mortgage needs better.

Closed mortgages

A closed mortgage is aptly named because it cannot be paid off, refinanced, or re-negotiated before the end of the mortgage term unless you pay a hefty penalty. The main benefit of a closed mortgage is that mortgage payments tend to be fixed. This means every month, you will be making the same payment towards your mortgage. If market rates fluctuate, your payment won’t be affected.

You can obtain a closed mortgage in Canada in a variety of terms. The most popular term tends to be a 5-year fixed mortgage because it is a good middle ground. It’s not too long that you feel stuck to one lender, but it’s not too short that you can’t budget for your future. Terms are available for less time or more time, depending on your needs.

If you talk to a mortgage broker or mortgage expert, they will likely tell you that closed mortgages are more popular. They tend to be cheaper, and most clients don’t anticipate needing to change their mortgage’s terms or rates during the term.

Open Mortgages

An open mortgage, on the other hand, is one that can be paid off, refinanced, or re-negotiated any time during your term without penalties. As you have more flexibility with this type of mortgage, a mortgage brokerage will charge you higher interest rates. This is meant to deter people from switching lenders/ banks without notice.

The main benefit of an open mortgage is that if you find a lower payment from other banks or lenders, you can easily switch your mortgage.

What Is The Difference Between a Variable vs Fixed Mortgage Rate?

A fixed-rate mortgage is when your interest rate stays the same throughout your term. This means if you agreed upon 1.55% at the beginning of your term with your brokers, True North or otherwise, that would be what you pay for the whole term. This is beneficial as market rates can change at any time. You wouldn’t want your payment to suddenly become higher because market rates are fluctuating.

True North Mortgage offers fixed-rate terms from 1 year to 5 years.

A variable-rate mortgage is the opposite. Your rate will change throughout the term based on what market rates are in Canada at the time. This can benefit you if the rates are low throughout the term. As they can go up at any time during your term, however, you never know how much you will be paying. This means you could end up paying more than you would with a fixed-rate mortgage.

Choosing between the two can be tough, but talking to a mortgage specialist, lender, or the brokers at True North can help.

The Bottom Line

Mortgages can be stressful and confusing, but they’re a necessary evil. Most people in Canada need to take out a mortgage from a lender or broker in order to get a house. One of the best options for a mortgage is True North Mortgage. Since their inception in 2006, their ratings continue to go up. They offer a wide range of rates, payment options, and terms to suit your needs.

We recently discovered a mortgage broker we like even more than True North.