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2yr fixed rates Grande Prairie
FAQ for Grande Prairie Mortgage Customers
We’ve compiled a list of the most frequently asked questions asked by Grande Prairie mortgage customers.
Why should I compare Grande Prairie mortgage rates?
Mortgages vary wildly, and if you don’t compare mortgages, you’re at risk of paying much more than you have to. Slight differences in interest rates will add up over time. The fees associated with mortgage also vary, and these rates are set by the mortgage lender. Talk to a Grande Prairie mortgage broker to find the best overall mortgage rate?
What is the difference between a fixed rate and variable rate mortgage?
A fixed rate mortgage has a set interest rate. If the interest rate when you take out the mortgage is 4 percent, the interest rate on your loan is 4 percent for the loan term. If you have a variable rate mortgage, the interest rate on your mortgage depends on the current interest rates charged by the big banks of Canada plus a margin to cover the lender’s risk and loan servicing costs.
If you are risk adverse, select a fixed rate loan. Then you won’t see the interest rate charged on your loan balance spike. On the other hand, the loan payments will remain steady even if interest rates fall. Roughly two thirds of Canadians have a fixed rate mortgage.
If you think interest rates will go down or are willing to take the risk of interest rates fluctuating, you might want to choose a variable rate mortgage. There is a relatively modest fee to refinance a variable rate mortgage to a fixed rate during the loan term, and you may not be charged for selecting a fixed rate mortgage when the loan is up for renewal.
Should I get an open or closed mortgage?
A closed mortgage is one that limits when you can pay down the loan principal. You might be allowed to pay so many dollars per year against the loan balance, or you may only allowed to make a lump sum payment against the loan balance once a year. If you make an extra principal payment, you may be hit with a prepayment penalty.
An open mortgage doesn’t have these limits. You can make lump sum payments against the loan balance any time you want. You typically pay a higher interest rate on the loan to offset the lender’s likely lower profits on the loan because you’re generally going to pay it off sooner. An open mortgage is the better choice if you expect to receive a big bonus or inheritance you’re going to dedicate to paying off the loan.
What is a rate hold?
A rate hold or interest rate hold is a time period at which you’re locking in the current (and best) mortgage rate. Suppose you’re quoted a 3 percent interest rate for your mortgage. The Grande Prairie mortgage broker will hold that rate for 30 to 120 days. If interest rates go up, you’ll still only be charged 3 percent when you close on the loan. If rates go down, most Grande Prairie lenders will honor the lower mortgage rate. Call us today to lock in the lowest 2 year fixed mortgage rate, your top Grande Prairie Mortgage Brokers.