Types of Mortgages
Fortunately for buyers, there are a variety of mortgages to choose from.
It is in your best interest to investigate each of them to determine which is the best for your situation. You probably won’t qualify for all of them. In fact, you may only qualify for one. But if you do qualify for more than one, you may save yourself money (and worry) in the long run if you do your homework before signing on the dotted line.
Fixed Rate Mortgages
Consider a fixed rate mortgage if either of the following describes you:
- You plan on living in your new home for many years, and/or
- 15-Year Fixed-Rate:
- Pay off the loan in half the time of a 30-year loan.
- Equity builds up more quickly than in a 30-year loan.
- Payments are higher (which may be a problem if you lose your job or become unable to work).
- 20-Year Fixed-Rate:
- Pay off the loan in 2/3 the time of a 30-year loan.
- The overall interest paid is considerably less than for a 30-year loan.
- 30-Year Fixed-Rate:
- The most common choice, especially for first-time homebuyers, as it’s the easiest of the fixed-rate loans to qualify for.
- Monthly payments are lower than for 15-year and 20-year loans. This can prove especially helpful if you do not have a lot of “padding” between the amount you can afford to spend and the monthly payment for your desired property.
- More desirable if you plan on staying in the same home for years, since equity builds more slowly than for shorter-term loans.
- For income tax purposes, this term provides the maximum interest deduction. You are not a risk-taker and prefer the stability of knowing how much your payment will be each month. Since most home loans are for a period of 30 years, if you want a payment you can count on for that long of a period of time, a fixed rate mortgage may be what works best for you. Once your loan amount and interest rate are calculated and locked in, a fixed rate mortgage will guarantee that you will have the same payment over the life of the loan. Making extra payments to principal will allow you to pay your loan off sooner. This may not always be the best choice, however. If interest rates are very high at the time you take out your loan, with a fixed rate mortgage you’ll be stuck with that high interest for the life of the loan (unless you choose to refinance). Conversely, if interest rates are very low, you’ll come out the winner with interest rates that will stay low no matter how high interest rates go in the future. The following are the advantages and disadvantages of the varying lengths and terms of fixed-rate mortgages:
Adjustable-Rate Mortgages (ARMs):
If you are more comfortable in taking a risk with your money or if interest rates are very high at the time you take out your loan, an adjustable-rate mortgage (ARM) may be the solution for you. You might also choose this type of loan if your planned ownership of the property is short-term or if you expect your income to increase to cover any potential rise in the interest rate.
- Generally, the interest rate when you take out your loan will be lower than a fixed-rate mortgage. Please note that this is true initially, not necessarily long-term.
- Since an ARM rate rises and falls depending on the prevailing interest rate, your mortgage payment will rise and fall accordingly. If your income is not sufficient to cover the highest possible payments, then this option is not for you. On the positive side, the lower initial payments will allow you to qualify for a larger loan than if you choose a fixed-rate. The downside is that your payments will increase if/when the rates go up.
- Typically, ARM interest rates are tied to a specific financial index (such as Certificate of Deposit index, Treasury or T-Bill rate, Cost of Funds-Indexed Arms or COFi, or LIBOR [London Interbank Offered Rate]) and your payment will be based on the index your lender uses plus a margin, generally of two to three points. Get the formula used by your lender in writing and make sure you understand what it means.
- Fortunately, the amount an ARM can increase is limited. There are “caps” on how much your lender can increase your rate, both for a period of one year and for the life of the loan. Plan ahead, and have your lender calculate what the maximum payment would be if your rate went to the highest amount allowed by the cap for your particular mortgage. If you are not confident you’ll be able to pay that amount on a monthly basis, perhaps you should reconsider this type of loan.
Convertible ARMs:
If neither the fixed-rate or the adjustable-rate mortgage seems like the best option, perhaps the convertible ARM will be right for you. This alternative combines the initial advantage of an ARM with a fixed rate after a predetermined number of years. Obviously, this type of mortgage has more advantages when the initial interest rate is low and the future rate is not guaranteed.
- Government Loans: Another mortgage option available to some people is a government loan, providing that you meet the qualifications for these loans.
- VA Loans: Veterans may qualify for a loan from the Veterans Administration. There is a limit on the amount you can borrow, so this option works best for those buying a lower priced home.
- FHA Loans: The Federal Housing Association offers loans to lower-income Americans. Look for the phrase “FHA approved” when looking at ads for homes.
If you’ve been thinking about downsizing, summer is the perfect season to make a move. The warm weather makes exploring new neighbourhoods easier, real estate activity is high, and it’s the ideal time to settle into a new home and community before the fall. But downsizing isn’t just about square footage, it’s about lifestyle. Choosing the right neighbourhood can make all the difference in how you enjoy this next chapter. Whether you’re retiring, becoming an empty nester, or just looking to simplify, here’s what to look for in a community-oriented neighbourhood and some of Guelph’s best spots to find it.
Guelph is full of cozy cafés and vibrant coffee spots—but when the weather warms up, there's nothing better than taking your latte outdoors. Whether you’re setting up shop for a remote workday or meeting us to chat real estate, these local cafés offer the perfect mix of great coffee, welcoming atmosphere, and (yes!) patio seating. 1. Red Brick Café 📍 8 Douglas St Red Brick’s downtown patio is tucked just off the main street, making it a peaceful spot despite its central location. Grab a spot under the shade and enjoy a treat, the Red Brick Cafe offers specialty coffee, delicious food, craft beer and a warm atmosphere. 2. Planet Bean Coffee 📍 2 Wyndham St N, 740 York Rd, 333 Grange Rd Planet Bean is a Guelph classic—and each location has its own vibe. The downtown shop offers sidewalk seating right in the heart of the city, perfect for people-watching between emails. Meanwhile, the York and Grange locations both offer quieter patios surrounded by greenery. 3. Capistrano Bistro & Espresso Bar 📍 146 Wyndham St N Not only is the inside of Capistrano beautifully styled, but their patio is also one of the more elegant options in town. With umbrellas, bistro tables, and a quiet street feel, it's a great spot to enjoy your afternoon. 4. Balzac’s Coffee Roasters 📍 5 Gordon St, Guelph, ON A beautifully designed café right in the downtown. Balzac’s brings Toronto café vibes to Guelph. With high ceilings, big windows, and well-brewed classics, it has a charming outdoor seating area, perfect for enjoying your coffee al fresco during warmer months. The patio provides a pleasant setting for informal meetings or a peaceful work session amidst the downtown buzz. 5. Double Rainbow Café 📍 60 Ontario St, Guelph, ON Nestled in the heart of The Ward, Double Rainbow Café offers more than just exceptional coffee and tea. It's a space where art, community, and inclusivity converge. The café boasts a selection of specialty drinks, including lavender and cardamom lattes, alongside a variety of teas and baked goods. Coffee + Conversation = Our Kind of Combo Whether you're planning your next move or just looking for a cozy corner to get work done, these local cafés offer more than just caffeine—they’re community hubs, meeting places, and inspiring spaces to connect. Need a recommendation—or want to meet for a coffee and real estate chat? Reach out to the Hudson Smith Real Estate Group and let’s make it happen.
Rockwood, Ontario, is a hidden gem nestled in Wellington County, offering a harmonious blend of natural beauty, community spirit, and convenient amenities. Whether you're seeking a peaceful retreat or a vibrant community to call home, here are the top five reasons why Rockwood should be on your radar: 1. Natural Beauty at Rockwood Conservation Area At the heart of Rockwood lies the breathtaking Rockwood Conservation Area, renowned for its limestone cliffs, caves, and glacial potholes. This natural haven offers a plethora of outdoor activities, including hiking, canoeing, and camping, making it a paradise for nature enthusiasts. 2. Active Lifestyle Opportunities For those seeking an active lifestyle, Rockwood doesn't disappoint. The town offers various recreational activities, including hiking trails, canoeing on the Eramosa River, and exploring the unique geological features of the area. The Rockmosa Older Adults Centre provides access to drop-in activities, social events, and fitness programs, ensuring residents have ample opportunities to stay active and engaged. 3. Vibrant Local Amenities and Events Despite its small-town charm, Rockwood offers a variety of amenities. The Rockmosa Community Centre is a hub for recreational activities, featuring sports fields, a splash pad, and a library. The town also hosts events like the Rockwood Farmers' Market, fostering community engagement and supporting local businesses. 4. Convenient Location Despite its small-town charm, Rockwood offers easy access to larger urban centers. It's situated less than 40 minutes from Milton and Mississauga, making it a convenient location for commuters. Additionally, the town features nice restaurants, quaint stores, and delicious bakeries, providing residents with local amenities and dining options. 5. Rich History and Culture Rockwood's history dates back to the early 19th century, with the Eramosa River playing a central role in its development. The town's historical sites, such as the ruins of the Harris & Co. Rockwood Woolen Mill, offer a glimpse into its industrial past. This rich heritage adds depth and character to the community. Rockwood combines natural beauty, a strong sense of community, convenient location, rich history, and active lifestyle opportunities, making it an attractive destination for individuals and families alike. If you're looking for a place that offers both tranquility and engagement, Rockwood might just be the perfect fit for you. If you're thinking about making a move, our team would love to help you discover all that Rockwood has to offer. From market insights to private showings, we’re here to guide you every step of the way. Let’s find your next home — in a place that truly feels like one.
