What Kind of Mortgages are Available?
When it comes to mortgages, there are almost as many choices as there are styles of homes. Let RBC Bank help you find the one that's right for you.
These common home-buying loans are also referred to as conforming and jumbo loans. Choose from fixed or adjustable rates with terms of 15, 20 or 30 years. You may even have the option of selecting a loan with an interest-only introductory period.
A fixed-rate mortgage ensures that your interest rate will stay the same over the life of your loan—which may be an important consideration if you plan to stay in your home for several years. When you choose the length of your repayment (usually 15, 20 or 30 years), keep in mind that while shorter term loans may have higher monthly payments, they also mean you pay less interest and build equity faster.
With an adjustable-rate mortgage (ARM), the interest rate you pay is adjusted from time to time to keep it in line with changing market rates. This means that when interest rates go up, your monthly mortgage payments may go up as well. The rates on an ARM usually change once a year after your introductory, fixed rate period, and there is typically a lifetime rate cap (or limit) on the amount of each yearly rate adjustment and the total amount the rate can change over the term of the loan. Some ARMs also offer a conversion feature, which allows you to convert from an adjustable-rate to a fixed-rate loan.
An interest-only mortgage will help you keep payments especially low for the first few years of your mortgage. Instead of paying the interest on the loan as well as part of the principal each month, you will pay interest only for the first few years of the mortgage. This is called the interest-only period. At the end of the interest only period, you will still owe the original amount borrowed and your monthly payment will increase to start covering that amount in addition to the interest.
RBC Bank offers a portfolio of unique loan packages to meet the needs of our diverse client base.
Private Banking Mortgage
As part of our Private Banking program, which provides personal attention to customers with more complex financial needs, we offer non-traditional mortgage packages.
If you are an emerging medical resident/doctor, dentist, lawyer, architect, veterinarian, certified financial planner (CFP) or certified public accountant (CPA), RBC Bank has designed mortgages to address your special financing needs. As you work hard to establish your career and juggle overwhelming student loans, we can help make homeownership a reality.
If you are a Canadian citizen purchasing property in the U.S., this unique lending option will give you U.S. estate tax benefits. Consult with a tax or financial advisor regarding your potential tax advantages and other implications.
Affordable Housing Program (AHP) Loans
An AHP mortgage can help low-to-moderate income families who cannot save for a down payment, but who pay their bills and deserve the opportunity to own a home. It is recommended that applicants take a pre-homeownership education course in order to make the home-buying process easier to understand.
These home financing programs sponsored by federal agencies offer low or no down payments, low closing costs and easier credit qualification.
Insured by the Federal Housing Administration (FHA), these loans are often referred to as government mortgages. They require lower down payments and accept higher debt ratios than conventional mortgages, so they're good for those buyers who otherwise might not qualify.
VA loans are available to veterans and service personnel who have met the required service time in the military. They're guaranteed by the Department of Veterans Affairs and, in most cases, require no down payment.
Rural Housing Loans
These low-interest-rate home loans are offered through the Rural Housing Service, a branch of the US Department of Agriculture. They are specifically tailored to low and moderate income persons who live in rural areas or small towns and require no down payment.
Housing Finance Agency Programs
The Housing Finance Agency programs offer special opportunities just for first-time homebuyers, including special rates and down payment assistance at certain income levels.