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Mortgage Basics
There’s so much more to a mortgage than just the interest rate.
A competitive rate of interest is important, but so is being able to build an affordable and convenient mortgage that may save you money.
A BMO Bank of Montreal mortgage representative can help you customize your mortgage to take into account virtually every contingency you think is important.
Choose the features and options that fit your needs
A mortgage should fit your individual priorities, whether they focus on security, flexibility or a combination of both.
Mortgage Options
Open
- Prepay as much as you want or completely pay out at any time without charge.*
Closed
- Make regular payments and perhaps limited prepayments
- Offers a lower interest rate than an open mortgage of the same term
Convertible
- Offers a lower interest rate than the open mortgage of the same term.
- Option to change to a closed term of one year or longer without charge**
Fixed Rate
- Interest rate stays constant to the end of the selected term
Variable Rate
- Interest rate fluctuates with the Bank’s prime lending rate
- Payments generally remain the same
- The amortization period is the number of years required to repay the mortgage
(both principal and interest). The amortization period may vary with fluctuations
in Bank of Montreal's Prime Rate: it may be longer if interest rates
have risen since the start of the term, or shorter if interest rates have fallen
since the start of the term.
Find out which mortgage options suit you best by taking our Online Mortgage Mate test.
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Choosing a Mortgage Term
We offer a wide range of terms from 6 months to 18 years. The length of term you select depends on your comfort level with the possibility of interest rates rising and the importance of a stable mortgage payment to your budget. As a general rule:
- Shorter terms are usually attractive if you believe interest rates will drop by the time you’ll be selling your home.
- Longer terms are preferable if stability of mortgage payment amounts is important to your budget.
If you're worried about interest rate volatility, consider locking in for at least three years.
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Contacting Other Mortgage Experts
In addition to your BMO Bank of Montreal mortgage representative, there are many experts you can turn to for advice:
Canada Mortgage and Housing Corporation
1 800 668-2642 or (613) 748-2000
www.cmhc-schl.gc.ca
Canadian Home Builders' Association
(613) 230-3060
www.chba.ca
Canadian Real Estate Association
(613) 237-7111
http://crea.ca/
Insurance Bureau of Canada
1 800 387-2880 or (416) 362-2031
www.ibc.ca
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