It can be confusing trying to understand all the different rbc mortgage rates terms and options available. But don’t worry, we’re here to help explain RBC mortgage rates and help you choose the best option for you. Keep reading to learn more.
RBC offers a wide range of mortgage products at different rates and terms to suit your needs. Their mortgage rates are some of the lowest in Canada and they offer a unique rate guarantee which protects you if rates go up before your closing date. They also have a choice of flexible payment options and pre-payment privileges. But with all these choices, it can be hard to know where to start.
The first step is understanding the types of mortgages offered by RBC:
1) Conventional Mortgages
-A conventional mortgage is any mortgage that isn’t insured or guaranteed by the government. This is the most popular type of mortgage in Canada.
-With a fixed rate mortgage, your interest rate stays the same for the entire term of your mortgage, usually 25 years. This means your payments will stay the same every month, making it easier to budget. If interest rates go down, you won’t benefit from lower payments unless you refinance your mortgage.
-With a variable rate mortgage, your interest rate can change over time, meaning your monthly payments could go up or down. This type of mortgage often starts with a lower interest rate than a fixed rate mortgage but there is more risk involved because your payments could increase if interest rates go up.
2) Insured Mortgages
-If you have a down payment of less than 20% on a conventional mortgage, you will be required to purchase default insurance. The two main types of default insurance in Canada are CMHC (Canadian Mortgage Housing Corporation) insurance and Genworth Canada insurance.
-Insured mortgages have slightly higher interest rates than conventional mortgages because the lender is protected from loss if you can’t make your payments and end up defaulting on your loan.
3) High Ratio Mortgages
-A high ratio mortgage is any mortgage where the down payment is less than 20%. All high ratio mortgages must be insured against default by CMHC or Genworth Canada so they come with some additional costs compared to conventional mortgages.
Now that we’ve looked at all the different types of mortgages offered by RBC, let’s look at how to choose which one is right for you: First, you need to decide if you want a fixed rate or variable rate mortgage based on how much risk you are willing to take on and how stable you want your payments to be each month. If you are comfortable with some fluctuation in your monthly payments, then a variable rate might save you some money in interest over the long term but if you want the stability of knowing what your payments will be each month, then a fixed rate might be best for you even though it comes with slightly higher interest rates. Second, if you have less than 20% for a down payment, then either an insured or high ratio mortage will be required which come with higher interests rates but offer protection for both yourself and the lender in case you can’t make your payments .
Conclusion: Choosing the right mortgage from RBC doesn’t have to be complicated or stressful—armed with this information, you can make an informed decision about which type of mortgage best suits YOUR needs without overpaying in interest or putting yourself at financial risk!