How does your mortgage measure up?

Working with a mortgage broker ensures you have a broad range of loan options, from an extensive range of lenders. Having this type of choice opens up excellent financing opportunities. However, all these choices tend to generate many questions.

Many home buyers are curious about what the average mortgage holder signs up for. The Canadian Association of Accredited Mortgage Professionals confirms that two-thirds of Canadian mortgages are fixed for terms of four or more years. Five-year-term mortgage are the most popular, with 56 percent of home buyers choosing this option.

When it comes to fixed versus variable rate options, age may determine in which direction the mortgagor is most comfortable going. People between the ages of 18 to 34 tend to choose fixed rate mortgages, while those in the 55 plus age category often prefer variable rate mortgages.

Fixed rate mortgages lock in the home buyer's interest rate for the term of the mortgage, allowing the home owner unfailing knowledge of exactly how much of his or her mortgage payment gets applied to the principal, and how much to the interest.

Variable rate mortgages involve fluctuating interest rates, with subsequent changeable amounts applied to the principal and interest. Overall, 68 percent of Canadian mortgage holders have fixed rate mortgages, while 27 percent have variable and adjustable rate mortgages.

Overall, Canadians are optimistic about their real estate market, with a reported 71 percent feeling that now is a good time to buy. Please call if you want to discuss your own loan requirements, and would like an update on the many mortgage options in today's market.

Terminology Tip

DOM - DOM stands for "days on market," meaning the number of days a property is listed on an MLS® before it's sold or taken off the market. DOM is a useful indicator of market activity: a lower average DOM is indicative of a seller's market, where fewer properties are listed and inventory sells more quickly; a higher average DOM is indicative of a buyer's market, where more inventory is available and properties take longer to sell.

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