CENTURY21® Northumberland Realty - Financing your Home Purchase

Financing your Home Purchase


Information on purchasing a new home.

Buying a home, especially a first home is both an exciting and scary process. It is by far the biggest purchase and investment you will likely make. You want to be sure that you get this right! Getting the correct information first will ensure that you do not make costly mistakes.

There are a number of different possible mortgage options as well as numerous financing considerations, all need to be taken into consideration.

Here is a list of these options and considerations so that you enter the market better informed:


A few basics to know before going to the bank.

  • INTEREST RATES, fees and terms are usually negotiable
  • AMORTIZATION periods can be 15, 20, 25 or 30 years. The longer the amortization period, the less per month you will pay, but the longer you will pay and the greater amount of interest you will pay.
  • MORTGAGE TERM is the period that the current mortgage contract will last. At the end of this period you will have to pay out the balance or re-mortgage (and frequently re-qualify). Your new mortgage term may be at a higher or lower interest rate. Generally banks give the best interest reates on short term mortgages.
  • MORTGAGE PAYMENTS may be accelerated where specifically allowed in some mortgage contracts. This may mean paying bi-weekly instad of monthly or it may include paying an extra lump sum once per year to reduce the mortgage. Either option will reduce the interest paid over the term.
  • VARIABLE RATE mortgages unlike fixed-rate mortgages may mean that you get a better interest rate and lower payment now - but that rate and payment may change over the course of your mortgage repayment, requiring a certain risk tolerance. However Variable rate mortgages will allow you to take a long term without getting penalized with higher interest throughout the term. This means you - not the bank - are taking the interest rate risk for the term of the loan.


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629 Water St East, Summerside PE C1N4H8