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This mortgage is for an amount which does not exceed 75% of either the appraised value of the property or the purchase price, whichever is lower. Your down payment is a minimum 25% of this "value".

With this type of mortgage, you contribute less than 25% of the cost of the home as a down payment. A high-ratio mortgage requires either mortgage loan insurance or an "administration fee" depending on which institution you get your mortgage with. Administration fees or Mortgage Loan Insurance have premiums of between 0.5% and 4.00% of the total mortgage amount. Available for either purchasing or refinancing. This "premium" can be added to the value of your mortgage.

This usually has a higher interest rate and shorter amortization than a first mortgage. Secondary financing is often used to make renovations to a home, or eliminate excess credit debts showing up on a credit report.

When you take out a mortgage, you have the choice of borrowing at either a fixed or a floating interest rate. With a fixed rate mortgage, the payments made are based on a "fixed" interest rate and as a result remain constant over a predetermined length of time. If you decide to take out a floating rate mortgage, your payments are linked to a "floating" interest rate and are therefore likely to change frequently depending on the arrangement.

Variable vs. Fixed Mortgages

The variable rate mortgage (V.R.M.) has become a very popular and aggressive way to finance your mortgage. The two forms being either "open" or "closed" offer to the mortgagor benefits and control far greater than the conventional "fixed" mortgage financing.

More about Variable Rate Mortgages

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