Buying condos for sale in downtown Toronto is never an inexpensive prospect. Even small condos in that area tend to cost several hundred thousand dollars. Most people, even if they have good jobs, would be stretching themselves to cover the mortgage payments on such a condo. But buying property is better for your long term finances than renting, so shouldn't you try to take whatever discounts and offers you qualify for to afford a mortgage? One of these offers is cash back. We'll tell you all about cash back mortgages so you know what you're getting.

In a cash back mortgage, once you finish paying off your mortgage (in ten years or twenty years or however long your term is), the bank will hand you a cheque for a certain amount of money. How much money you get back depends on the cash back percentage they're offering you and the size of the Brampton mortgage you took out in the first place. So if you took out a mortgage for $100,000 and your bank was offering 4% cash back, you would get a cheque for $4,000 when you finished paying off your mortgage.

The amounts offered in cash back vary from bank to bank, as to the other features (amortization period, down payment, interest rate, etc) attached to it, so be sure to review all your options carefully. Currently many Canadian banks are advertising cash back mortgages to people who are looking at homes for sale in Markham. The average cash back rate is about 4%, but some banks, like Royal Bank and CIBC are offering up to 7%.

Because you don't get your money until you finish paying off your mortgage, a cash back option isn't really useful to you if you need money now. It's more like a reward for your hard work in paying off the mortgage on your Toronto townhouse. It's a nice little prize you can use to go on vacation or do some renovations after you've lived in your house for a while, but the cash back option will not help you afford a larger home or make your monthly mortgage payments at the outset.

In order to offer the cash back option, many banks charge higher interest rates for cash back mortgages than for regular mortgages. Higher interest rates mean your monthly payments on your Forest Hill homes are higher and you end up paying more overall for your mortgage. In this way cash back can actually cost you money on your mortgage, so before accepting a cash back mortgage plan, take care to note the interest rate on the non cash back option and figure out how much each will cost you overall. You may be surprised by the difference.