Most people when they walk into a bank or lending institution are offered a fixed rate, while others are offered a variable with little or no explanation.

Let's dispel any myths or trickery associated with the quoting of variable and fixed rate terms. You can generally put all rates into two categories, fixed and variable. With a fixed rate, your locking in your rate for the term or your mortgage, this guarantees you the same payment through out the period of your loan. With a variable it fluctuates throughout the term of your mortgage. There is an increased risk with this option, but the pay off is possibly a lower average rate.

Each of the two categories, fixed and variable have an additional two categories of there own; open and closed. An open mortgage allows you to pre pay or pay off your mortgage with no penalties. This option is generally more costly because the lender is not guaranteed that they will be servicing your loan for the entire term. A closed option locks you into the term you choose. If you pay the mortgage out before the end of the term you could be subjected to pre payment penalties. These penalties could be avoided by porting the mortgage with in 60 to 90 days of selling the old home, blending any new money needed or having the original mortgage assumed by the purchaser.

With the fixed option you can expect a lower rate. Which one is best for you, apply now and we'll find the best rate, term and mortgage to suit your needs.