For many people, mortgages are a not a favourite subject of conversation since they are associated with debt and financial trouble. That shouldn’t be an excuse to stay in the dark and ignore the relevant facts about this financial field. We will fill you in on the matter with some interesting bits of knowledge.
If you are looking for mortgages in Guelph, you might be surprised by the way this industry operates and the amount of details that could impact the real value of any loan. Some of those intricacies might work in your favour and some could add more debt to your account, so getting familiar with them is a good idea in any case. Let’s go through some fundamental facts about the mortgage market in Canada that you might or might not be aware of:
Average house price in Canada is now more than $600,000.00
Obviously, the price greatly depends on size and location of the house, but homeowners, in general, are looking at a commitment greater than half a million. Those interested in real estate in major urban centers should be prepared for even higher figures. With so much at stake, choosing the best loan available is a delicate matter.
Standard amortization period is 25 years
Mortgage loans in Canada usually last for quarter of a century, so even expensive real estate can be paid off without dramatic sacrifice. It is possible to negotiate a shorter amortization period, while longer ones are theoretically possible but could be difficult to obtain. It’s perfectly OK to go for the full length initially since it will be easy to accelerate payments later if you wish to do so.
An average mortgage is paid off five years before due
It appears Canadians are very responsible when it comes to meeting their obligations – in the period from 2008 to 2012; they cleared mortgages five years ahead of schedule on average. This is also a testament to the stability of the job market in this country, so if you can ensure good employment, you probably can take out a mortgage without too much anxiety.
Average Canadian has already paid off 70% of his mortgage
Good habits with debt management allow Canadians to be in control of their own homes. A typical citizen is well on his way to completing his mortgage agreement and becoming full owner of his home, with 70% of obligations already settled. This is a good illustration how stable the market is and how little risk you are assuming when you take a mortgage loan in Canada.
Interest rates above 3% are expensive
There is a wide variety of interest rates in the market, and they don’t always compare well to each other, but as a general rule of thumb, you shouldn’t accept anything that approaches 3%. In fact, some providers are offering APR’s that are well under 2.5%, although special conditions might apply. Don’t be blinded by the lowest figure – always make sure to read the fine print and understand exactly how your monthly payments will be calculated.