Closed Mortgages

Unsure of a closed mortgage is the right product for you?  Contact us to learn more!

Quick Information About Closed Mortgages

• Offers security of rate for the term (primarily with fixed)

• Closed mortgages cannot be changed until the end of the term agreed apon by the bank or lending institution and the borrower

• If the borrower must break the mortgage contract early they will be subject to a penalty

• Penalties are calculated as the great of 3 months interest or the Interest Rate Differential (IRD)

• IRD calculation: (Mortgage balance) x (current rate – new rate) x (years remaining on term)

• Example of IRD vs. 3 months interest: $100,000 x (5.49% – 3.65%*) x (32 months/12) = $4,784; Monthly interest payment approx. $1150 (originally a $250,000 mortgage) x 3 = $3,450; $4,784 payout penalty to break a 5 year term roughly 2.5 years early. *interest rate used for new rate in calculation is always the rate for the term remaining on the contract, ie. 2.5 years remaining, rate used in calculation is for a 3 year term.
  

• Closed Mortgages
• Commercial Mortgages
• Conventional or Unconventional
• Fixed Rate
• Lines of Credit
• Open Mortgages
• Variable Rate