Compare top Canadian brokers & lenders to get lower 5-Year Variable Open Mortgage Rates

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Rates Updated: Wednesday, November 20, 2019 10:20AM
Mortgage Calculators
Try out our interactive mortgage calculators to explore different payment options, determine how much you can afford to borrow, compare refinancing options, calculate pre-payment penalties, explore the rent vs. buy decision, calculate land transfer taxes and much more.

Rates.ca Mortgages

For those who are unfamiliar with the process, choosing the right mortgage can be intimidating. With so many different types of mortgages available, a potential homeowner can have a difficult time trying to make a decision about the best mortgage rate.

One of the first things a potential homeowner needs to decide is whether he wants an open or closed mortgage. In an open mortgage the borrower has the flexibility to make partial or full payment at any time before the loan matures without a prepayment penalty.

On the other hand, a closed mortgage is one that prevents the homeowner from refinancing, renegotiating, or paying his mortgage in full before the maturity date without a prepayment penalty. The repayment term for a closed mortgage loan can range from as low as six months and as long as 10 years, sometimes more. There is a possibility interest rates may be lower on closed mortgages, but this depends on economic conditions at the time. Before choosing this type of mortgage, it is important for a homeowner to understand one thing: prepayment penalties can be substantial. Before a homeowner agrees to pay a prepayment penalty, he needs to weigh the cost associated with the transaction.

Best Candidates for Open Mortgages
Those most likely to benefit from closed mortgages are first-time buyers who have plans to live in their homes for many years. Open mortgages work best for those consumers who only plan to live in their homes for a few years because they will not have to pay a prepayment penalty when they sell the home before it matures.

This type of mortgage is also an excellent choice for consumers who wish to watch the market for lower interest rates or are expecting a financial windfall in the near future because they will be able to pay off the loan without worrying about a prepayment penalty.

Variable rate open mortgages are ideal for those who want a term that has the potential to save them money; they wish to make additional payments without worrying about paying a penalty; or they wish to take advantage of current interest rates by converting their variable rate open mortgage to a closed, fixed rate loan.

Five-year variable rate open mortgages offer homeowners the flexibility to convert the mortgage into any type at any time without penalty. These mortgages also allow consumers to experience the lowest mortgage rates for five years. There are no restrictions on prepayment with this type of mortgage; you can pay in full or simply make additional payments in order to pay it off sooner.
Mortgage Guides
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Mortgage vs. HELOC
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Closing Costs
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Mortgage Payment Frequency
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Fixed Vs. Variable Mortgage Rates
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Mortgage Term
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Obtaining Or Renewing A Mortgage
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Open vs. Closed Mortgage
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Mortgage Renewal Facts
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Mortgage Approval Process
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First Time Home Buyers
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Land Transfer Tax
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Shop Before You Renew
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Renting Or Buying A House
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Mortgage Down Payment
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How To Buy a Mortgage in Canada
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Mortgage Refinancing
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Mortgage Default Insurance
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Mortgage Prepayment Options
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Mortgage Amortization
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