When the average Canadian homeowner-to-be goes in search of the best mortgage package, it is certain that they will evaluate several banks on their respective terms of payment, interest rates, and prepayment options depending on the amount of cash flow they wish to retain. CIBC, RBC, and HSBC offer unique mortgages depending on the status of the buyer, but all possess similiar payment methods.
A fixed-rate closed mortgage, or one in which the loan is paid back in fixed increments, is offered by CIBC at terms of 1,2,3,4,5,7, and 10 years. A mortgage on a 5-year term must be paid back at an interest rate of 5.29%, and the buyer has the option to prepay 10% each year. A buyer would choose this time of mortgage, as opposed to a fix-rate open mortgage, if they want their payment to be unaffected by fluctuating interest rates. The same mortgage is offered by RBC at a slightly smaller interest rate: 5.19%. However, a buyer may also choose RBC’s special offer of a 3.79% interest rate, on the condition that 8% interest will be paid back over a period of 25 years. At HSBC, a fixed-rate closed mortgage is offered at a 5.29% interest rate or 3.35% for HSBC Premier customers. Such a customer is defined by holding $100,000 in assets with the bank.
Each bank offers specific mortgage packages depending on the type of customer. CIBC offers an AeroMortgage, which provides the buyer with one Aeroplan mile, or points towards airline flights, for each dollar that is paid back on interest. RBC offers a Vacation mortgage for buyers interested in owing a second vacation property. Alternatively, HSBC offers an Equity Power mortgage, which allows the buyer to receive funds based on equity, as calculated between the difference between the value of their home as appraised and the value of their mortgage. A homeowner may consider this option to facilitate the liquidity of their primary asset, their home.
http://www.cibc.com/ca/mortgages/fixed-rate-closed-mortg.html
http://www.rbcroyalbank.com/products/mortgages/fixed-rate-mortgage.html
http://www.hsbc.ca/1/2/en/personal/mortgages-and-loans/mortgages/find-mortgage
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