Mortgage Guide: Types of Interest Rates

If you are a first time home buyer one of the first things you’ll need to get is your mortgage pre-approval. This is how much money you can spend on a house. From there you’ll enter the Windsor real estate market. You’ll start searching for houses for sale in Windsor or whatever other Greater Windsor Area you’d like to live in from LaSalle to Leamington and everywhere in between. Once you’ve found your Windsor home and you’re ready to buy you’ll need to finalize your mortgage. One of the big questions will be the type of mortgage rate you get. We’ll cover your options here so when you have the conversation with your mortgage broker, you'll have an idea of what you’d like!

There are 3 main types of mortgage rates; Fixed, Variable, Hybrid and we’ll look over what each one means so you can start to decide what is right for you.

Fixed Interest Rate
- Your rate stays the same over the entire course of the mortgage. Your payments will always be the same over the entire term. While it provides stability and knowing that you’ll always be paying, typically it is a higher rate than a Variable Interest Rate.
Variable Interest Rate
- Your interest rate can increase or decrease over the course of the term. The variable interest rate is typically lower than the Fixed Interest Rate. You have the option to have fixed payments however, this is a fixed payment, variable rate mortgage. You can also have it completely variable and pay your mortgage as the rates change.
Hybrid or Combination Interest Rate
- This option combines both Fixed and Variable interest rates in your mortgage. The fixed portion provides protection against increasing rates and the variable portion can potentially be beneficial if rates fall. Typically inside the whole term, both the fixed and variable rates will have their own individual terms.

This info can help you establish a baseline knowledge on mortgages for when it comes time to decide. Of course your mortgage broker or lender can explain things more in depth and provide further assistance in choosing the right option for you. All of the agents here at Jump Realty work with amazing lenders and can get you in touch with a partner to help get you the best mortgage possible. For more infromation CLICK HERE.

Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Tecumseh, Kingsville, and Chatham, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!