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TD Fixed Interest Rate Mortgages
A fixed rate mortgage, simply put, is a mortgage where your interest rate and monthly payments stay the same for the duration of the term, whether it's 6 months, 1 year, 2 years, 3 years, 4 years, 5 years, 6 years, 7 years, or even 10 years. Fixed rate mortgages are excellent for people who like stability in their mortgage interest rate and monthly payments because of the predictability it offers, as opposed to a variable rate mortgage where the monthly payments don't change but if the TD Mortgage Prime Rate rises then the portion going towards interest will go up.
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Basics of fixed rate mortgages
- Annual Percentage Rate
The Annual Percentage Rate (APR) reflects the cost of borrowing over an entire term. It is normally higher than the variable interest rate because it includes some or all of the fees, as required, that apply to your mortgage loan in addition to interest.
- Mortgage rate hold
A mortgage rate hold is when you lock in a specified mortgage rate for a set period. What this means is that, once you have been pre-approved, we'll hold your interest rate for the next 120 days subject to conditions. If the interest rate on the term chosen in your pre-approval goes up, we will hold the rate we pre-approved you for if you meet all other conditions. If the interest rate goes down during this time, you can ask to have your pre-approved interest rate adjusted to reflect the lower current rate.
- Fixed rate open mortgages
An open mortgage is a mortgage that lets you pay off your mortgage partially or in full at any time without worrying about prepayment charges. More flexibility, more freedom, more options.
However, an open mortgage may have a higher interest rate than the same term that's closed to prepayment because of the added prepayment flexibility.
- Fixed rate closed mortgage
In contrast to an open mortgage, a closed mortgage typically has a lower interest rate for the same term. Closed mortgages also have a prepayment limit, which means you are only allowed to prepay 15% of the original principal amount per year without any charges. If you want to pay more than 15%, prepayment charges may apply.
- Convertible mortgages
If you want to start with an open mortgage and then lock into a closed mortgage, a 6-month convertible mortgage could be the right choice for you.
If we offer you a renewal, you can keep selecting a 6-month term until you're ready to move to a longer term. This enables you to pick a new, longer term any time you feel interest rates are favourable.
Common questions about fixed rate mortgages
If you're seeking predictability and stability in your budget, a fixed rate mortgage could be the right choice for you. Fixed rate mortgages help ease anxieties because the interest rate and the regular payments you make will stay constant for the term of your mortgage, even if interest rates rise. This means you'll know exactly what to budget for, throughout your term.