When it comes to financing your first home — or any home purchase for that matter — not all mortgages are created equal. “Just as short and long term goals should drive your financial and investment plans, the same holds true when choosing the right mortgage to meet your individual needs and circumstances,” says Attif Sayani, personal banking manager at Scotiabank’s Country Hills Town Centre branch.

Calgary Herald ArchiveBefore signing buying that dream home, research mortgage options.

“For most people, the goal is to pay down your mortgage as quickly and efficiently as possible.

However, simply going with the lowest rate you can find isn’t always the best strategy.”

Sayani recommends reading the fine print on the terms and conditions related to your mortgage.

Some mortgages are very flexible, while others can be quite rigid, limiting opportunities to make extra payments, or including additional costs that can curb any rate advantage you may receive.

“Any conversation with your mortgage specialist should include discussion on more than just how much you earn, how much the home you want to buy costs and what the payment will be,” says Sayani.

“Ideally, it should fit your financial goals. For example, if contributing to your investments is as important to you as building equity in your home, you want to ensure that your budget can accommodate both.”

Sayani identifies several factors that can influence the overall cost of your mortgage. They’re worth checking out before you sign on the dotted line:
You have found an awesome rate. Great — however, that’s only one part of the equation. Before you commit, find out if it includes any other associated costs, such as an application fee or paying for your own property appraisal.

Sometimes these added costs can cancel out any advantage you may have received for a nominally lower mortgage rate.

Do you have the flexibility to make pre-payments or extra payments?

If so, how often? Is it an openterm mortgage that you can prepay or pay off any time, without penalty — or does it limit the frequency (for example, you can only make an extra payment on your mortgage “anniversary?” )

If your goal is to pay down your mortgage as quickly as possible — but you choose a mortgage with limited flexibility in this regard — it could cost you more in the long run.

Is there a cost to early renew? With today’s low mortgage rates, this is one of the most frequently asked questions lenders are hearing.

Depending on how much time has elapsed in your current term, these costs, which are based on interest rate adjustments, can add up. If there is a cost to early renewal, find out if there are other options you can take advantage of such as blending your current rate with a lower rate and locking it in at a longer term (for example, if you have two years left on your current term you could blend the rate and re-new to a three or five year term). Your mortgage advisor can help you determine if this strategy will help you save money over the long term.

insurance terms. Find out if the mortgage insurance policy, which pays off the mortgage in the event of your death, has an “original age advantage” that locks in the premium based on your current age. If it’s a term policy, the premium could increase as you get older.


Fixed versus variable rate mortgage.