A first mortgage and second mortgage are both loans that are financed with your home while it is held as a collateral by the lender. The term “first mortgage” refers to the original loan amount you borrowed to purchase your home. The term “second mortgage “refers to the funds you borrow in addition to your first mortgage which allows you to access the equity in your home.
FIXED RATE MORTGAGES
With a Fixed rate mortgage, the mortgage rate and payment you make every month will stay the same for the remaining term of the mortgage, in another word you can “Set it and forget it”.
VARIABLE RATE MORTGAGES
With a variable rate mortgage, the mortgage rate will fluctuate based on the prime rate, where the prime rate refers to the rate that the bank of Canada assigns. A variable rate is always quoted as Prime plus or minus a specified amount.