The market for mortgages in Canada comes with a lot of variables and you’ll really need an expert to help clear up what your Ottawa mortgage options are. Some options are riskier than others, and you’ll need to know exactly what these risks are before committing to one type of loan over another.
Canada has always had a banking sector that is more conservative than the US. The economy has been blamed for the housing crisis in the US, but before the economic downfall even began, lenders were offering mortgage products that were very shaky and unstable.
Some lenders were, and still are, offering condo loans to people that didn’t really qualify for them. These people were destined to run into trouble, economic downfall or no economic downfall, later on. Luckily, the people living in this great White North have always had to succumb to a more stringent regulatory environment. Moan as we may, we have always been protected from unscrupulous banking routines unlike the citizens of the United States.
Your Ottawa mortgage options
For many years the standard 25 year mortgage held its place as the basic Ottawa mortgage option available. In recent years, a new 40 year period for amortization has evolved that gives a new perspective to Ottawa mortgages. It does make owning a new condo a possibility for those that could otherwise not afford a 25 year term.
This is a conservative way of cutting more slack for Ottawa mortgages. It gives another option, but does not carry too much risk for either the bank or the condo buyer. The same rules applying for a loan qualification and banks are just as strict to give approval for a 40 year mortgage.
Variable rate mortgages that are front loaded are also quite a new option in the mortgage industry. You get a better-than-average discount on the prime rate of interest for a specified amount of time. Once this time period has ended you may choose to get locked into a rate that is fixed.
Your mortgage options are complex and should be dealt with by a professional mortgage expert in the Ottawa area. It is a good idea to read everything you can about Ottawa mortgages, but you really need to have a face-to-face meeting with an expert before you choose a condo loan.
UPDATE: Please note recent changes to amortization rates now only allows for 35 years and not 40 years.
HomeLife Capital Realty Inc., Brokerage*
