Current Mortgage Rates

Term
6 months

You have finally made the landmark decision to buy your own home. But while you look forward to the peace and security your new home will provide, you may be intimidated and confused by the bewildering array of mortgage options available. With 25 years of experience in the field, Aero Mortgages can lead you safely through the maze of choices.

At Aero Mortgages, we strive to make your borrowing experience as fast and easy as possible. With that in mind, we've compiled a list of the most commonly asked questions when shopping for a mortgage. If you have other questions, email us and we will get you answers as soon as possible. When you're ready to apply for your mortgage, just click Apply Online Now! to start the no obligation, online application process.

1. What is the purpose of a mortgage broker?
2. Who does the mortgage broker work for?
3. Who will lend me the money for my house?
4. How is the mortgage broker paid and what are the fees?
5. How do you guarantee the lowest rate?
6. What types of mortgages are available?
7. How much can I borrow?
8. What is the RRSP Home Buyers' Plan?
9. What information does the broker need from me?
10. How long does it take to process my mortgage application?
11. Can the mortgage broker also provide mortgage insurance?

1. What is the purpose of a mortgage broker?

The mortgage broker acts as a matchmaker between lenders and borrowers. Because Aero specializes in mortgage lending, we can provide a personal assessment that matches your specific needs to the ideal lender. Additionally, Aero can facilitate the securing of funds for buyers with high debt ratios or difficult credit ratings.

At Aero, our goal is to secure the maximum financing desired at the absolutely lowest cost to the consumer.

2. Who does the mortgage broker work for?

Aero Mortgages works solely for you, the borrower.

3. Who will lend me the money for my house?

Aero has access to a large pool of conventional lenders (banks and trust companies), private lenders, pension funds, real estate syndicates, life insurance companies, and foreign banks.


4. How is the mortgage broker paid and what are the fees?

The lender pays all fees for a first residential mortgage. For second mortgages, fees are paid by the borrower.


5. How do you guarantee the lowest rate?

We guarantee the lowest rate by shopping the market thoroughly and exhaustively. With 25 years of mortgage brokering experience, Aero has access to a wide pool of lenders and contacts in all areas of the industry. And we know the market better than anyone. Apply Online Now to secure the lowest possible rate for your mortgage.

6. What types of mortgages are available?
   
   
   • Conventional vs. high ratio mortgages

A conventional mortgage is a loan for no more than 75% of the appraised value or purchase price of the property, whichever is less. This is the most common type of mortgage and is available through most lenders.

For first-time buyers, a high-ratio mortgage is available for up to 95% of the appraised value or purchase price, whichever is lower. For experienced buyers, the maximum of a high-ratio mortgage is 90%. Since the loan is for more than the usual 75%, it must, by law, be insured against default through CMHC. This insurance cost can be a percentage of the mortgage amount, and is added to the mortgage principal.

• Fixed rate vs. variable rate

  A variable interest rate floats or varies during the term of the mortgage. If the interest rate decreases, then more of your payment goes toward the principal and less towards the interest.

  A fixed interest rate remains the same throughout the term of the mortgage. If interest rates are expected to rise, a fixed rate mortgage is recommended.

• Closed vs. open mortgages

  A closed mortgage is one that cannot be prepaid, renegotiated or refinanced unless an interest penalty is paid. Closed mortgages can often be prepaid at 15% of the outstanding balance per annum without penalty.

  A closed mortgage usually offers a lower interest rate than an open one of the same term. However, with an open mortgage you can make additional payments on the principal, or pay off the mortgage completely, without notice or penalty.

• Short term vs. long term

  The term is the length of time for which the money is loaned at a particular rate of interest. After the term expires, you can either repay the balance of the principal then owing or renegotiate the mortgage at current rates.

  Short-term mortgages are appropriate if you believe interest rates will drop come renewal time. Long-term mortgages are suitable if you believe current rates are reasonable and you want the security of budgeting for the future.

7. How much can I borrow?

The major factors considered are your debt service ratios, credit history, and income, in addition to the equity in the property.

The Gross Debt Service Ratio (GDSR) is used to determine whether you can afford the home you want. The maximum percentage is usually 32%. It is calculated as follows:

Total Annual Mortgage Payments + Annual Real Estate Taxes +
Annual Heating Cost + Half-Annual Condo Fees (if applicable)
Total Household Income

The Total Debt Service Ratio (TDSR) is used in conjunction with the GDSR. It is the percentage of your total annual family income that can be used for total annual debt payments, including shelter payments. Most lenders have a maximum TDSR limit of 40%.

8. What is the RRSP Home Buyers' Plan?

   This plan allows you to withdraw a maximum of $20,000 from your RRSPs to purchase or build a home. No income tax is deducted from these funds, as long as they are repaid to your RRSP according to the government's repayment schedule.
   

9. What information does the broker need from me?

   Every loan may require its own specific information, but usually will include:

   • Borrower's name and address
   • A copy of the accepted Offer To Purchase and the land survey
   • A salary letter from your employer (self-employed individuals need financial statements for the past three years as well as personal income tax returns)
   • Confirmation that your down payment came from your own resources (i.e. bank statements or a gift letter)
   • A list of all your assets and debts along with account numbers
   • A copy of the Real Estate Listing if buying an existing home
   • Condominium financial statements, if applicable
   • If you are buying a home to be constructed, we need a picture of the property, a copy of the building plans and specifications, the land survey, and your agreement with the builder
   • Your social insurance number, chequing account information and contact information for your lawyer

10. How long does it take to process my mortgage application?

    Aero takes pride in providing prompt mortgage processing. Residential mortgage approvals vary from one to three days, if you provide all information with the original application. Funding is usually available one week after approval.
    
    

11. Can the mortgage broker also provide mortgage insurance?

Yes, Aero offers a variety of insurance options, including Life Insurance and Mortgage-Life Insurance. Life is a standard term life insurance policy that pays out a pre-set amount. Mortgage-Life generally carries a lower premium and is in place as long as you have your mortgage but only pays the balance of your mortgage.