Conventional Mortgage

Your mortgage can be transferred to a new property if you move. One of our experts would love to review all of your options with you. 

Rate refers to the interest rate you'll pay on your mortgage. You have two options to choose from:

1. Variable rate: The interest rate fluctuates with ATB’s prime lending rate (we call that “Prime”) throughout the term but, in most cases, your payment amount stays the same. That means, if rates go down during your term, a larger portion of the payment is applied to the outstanding principal amount of your mortgage loan. (The principal amount of your mortgage loan is the amount you borrowed to buy your home or property, which we refer to as the “Principal Sum”.) This all means you could pay down your mortgage faster and save on interest. If Prime rate goes up during your term, a larger portion of the payment is applied to interest and less the principal.
2. Fixed rate: Both the interest rate and payment amount stay exactly the same to the end of the term. Because the rate is guaranteed, it’s usually higher than the variable rate mortgage over the same term.

TIP: Deciding between a fixed and variable rate: If rates are expected to go up soon, or if you have a strict budget, you may want to choose a fixed rate and lock in at the current low rates. But if you think rates are likely to stay the same or even drop, and you’re comfortable with the possibility of some fluctuation in your payments, a variable rate could save you money.

Term refers to the length of your current mortgage loan agreement. The most common mortgage term is five years, but mortgage terms can be as short as six months or as long as 10 years. Shorter terms usually offer lower rates and may be a good choice if you think interest rates may go down or you anticipate a move in the next few years. When your term “matures” (ie, expires, aka your “maturity date”), you can either pay off your balance or renew for another term. So you could have a mortgage with a 25-year amortization (the number of years that you’ll take to pay off your whole mortgage) and have five separate five-year terms over that time frame. There are two different types of mortgages:

1. A closed term is a mortgage that usually offer a lower interest rate, but has restrictions on switching lenders and how much you can pre-pay the balance before your term is up. Bottom line: you get a lower rate, but less flexibility.
2. An open term means you can make additional payments of any amount— including paying off your mortgage in full—whenever you want. Bottom line: you get more flexibility, but pay slightly higher rates.

TIP: Deciding between a closed and open term mortgage: If you’re anticipating big life changes or a big bonus that you want to put towards your mortgage, you’ll likely benefit from the extra flexibility offered by an open term mortgage. If you think life (and your money situation) won’t change much over your mortgage term, then a closed term is a good way to go.