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Never Get These Types Of Mortgages In Canada

Buying a home is a major financial decision and one of the biggest investments you will make in your lifetime. It's important to be knowledgeable and informed when it comes to choosing a mortgage that works best for your personal and financial situation.

Unfortunately, there are some common mistakes that Canadians make when it comes to their mortgages. These mistakes can end up costing you thousands of dollars in the long run. To help you avoid these traps, we have compiled a list of mortgages that you should never get in Canada.

Variable Rate Mortgages

While a variable rate mortgage may seem like a good idea at first, it can end up costing you more in the long run. These mortgages have interest rates that are tied to the Bank of Canada's prime rate, which can fluctuate over time. This means that your mortgage payments can also increase, leaving you with less money in your pocket.

Additionally, variable rate mortgages typically have a lower interest rate at the beginning of the term, but can increase significantly once the term is up. This can result in higher monthly payments and a longer repayment period. It's important to carefully consider the potential risks before choosing a variable rate mortgage.

Interest-Only Mortgages

With an interest-only mortgage, you only pay the interest on your loan for a set period of time, usually 5-10 years. While this may seem like a good option for those looking for lower monthly payments, it can end up costing you more in the long run.

After the interest-only period is over, you will still owe the full amount of the principal, which means your monthly payments will significantly increase. This can put a strain on your finances and may leave you struggling to make ends meet. It's important to carefully consider the long-term implications before choosing an interest-only mortgage.

Balloon Mortgages

A balloon mortgage is a short-term loan with a fixed interest rate for a set number of years, usually 5-7, and then requires a large lump sum payment at the end of the term. This type of mortgage can be risky, as the lump sum payment can be a significant amount of money that may be difficult to come up with.

If you are unable to make the balloon payment at the end of the term, you may be forced to refinance or sell your home. This can result in additional fees and stress. It's important to carefully consider the implications of a balloon mortgage before choosing this option.

Call to Action

Avoiding these types of mortgages is crucial for protecting your financial health. If you are considering buying a home or need help with your current mortgage, it's important to seek expert advice. Justin Chausse from Chausse Mortgages is a trusted and experienced mortgage broker who can help you make the best financial decisions for your personal situation.

Don't fall into the traps of these risky mortgages. Book a call with Justin today to get expert mortgage advice and improve your personal finance knowledge. Your financial future will thank you.

Book a call with Justin Chausse: https://chaussemortgages.ca/appointment/