What's the difference between a fixed and variable rate mortgage?
With a fixed-rate mortgage, your interest rate will never change during your mortgage term. It stays locked in, meaning your monthly mortgage payments will remain fixed and won't fluctuate during the term.
Variable-rate mortgages have interest rates that can fluctuate during your mortgage term. The rise and fall of interest rates can cause your monthly borrowing costs to vary as well.
What's the difference between a conventional and an insured (high ratio) mortgage?
A conventional mortgage is one where you place a down payment of 20% or more. An insured mortgage (or sometimes called a high ratio mortgage) is one where you put a down payment of less than 20%. Mortgages with less than 20% down payment require mortgage default insurance, hence why these mortgages are referred to as insured mortgages.
Peoples Trust mortgages
Peoples Trust offers fixed-rate mortgages that range in term lengths of 1 to 5 years. The mortgage rates Peoples Trust posts on their website are for insured mortgages. Conventional mortgages are subject to an additional premium.
If you're looking for a lower interest rate and can take on a little more financial risk, Peoples Trust also offers a 5-year variable rate mortgage, referred to by Peoples Trust as an adjustable-rate mortgage.
What are mortgage prepayments?
Mortgage prepayments allow you to pay off your mortgage sooner and save on interest costs. Any extra payment you make towards your mortgage is considered a prepayment. On mortgages with open terms, you can make unlimited prepayments. On closed term mortgages, you'll be limited in how much prepayments you can make every year.
Peoples Trust mortgage prepayments
On all of Peoples Trust's closed term mortgages, you can make a lump sum prepayment of up to 20% of your original mortgage amount every year. You can also increase your mortgage payment by up to 20% a year, as well.
Getting a mortgage with Peoples Trust
Peoples Trust caters to borrowers who don't meet the traditional mortgage requirements of the major banks in Canada. They specialize in providing mortgages to those who are self-employed, new immigrants, and those with weaker credit histories.
If you have a particular mortgage need, Peoples Trust can work with you to find the best home financing solution. Peoples Trust primarily works with a network of mortgage brokers to syndicate their mortgage products. You can also contact them directly to speak with a Peoples Trust mortgage planner, who can answer any questions you may have, or help you get started with a new mortgage application.
Renewing your Peoples Trust mortgage
You can start the process of renewing your mortgage up to 90 days before your mortgage term comes to maturity. You don't need to re-qualify again when you renew your mortgage with Peoples Trust.
Peoples Trust will call you during the 90-day renewal period to discuss your mortgage renewal options. You can also proactively contact Peoples Trust to get the renewal process started yourself. Once you've renewed your mortgage with Peoples Trust, your new interest rate will be locked in until the start of your new mortgage term.
About Peoples Trust
Founded in 1985, Peoples Trust is a privately-owned trust company based in Vancouver, British Columbia. They also have offices in Calgary and Toronto.