Variable Mortgage Rate VS Fixed Mortgage Rate
Which Option Is Right For You?
Here are a few tips to keep in mind:
With a variable mortgage rate, your mortgage payment fluctuates throughout the term of your mortgage depending on where the prime rate is at. If you are a risk taker, this option may pay off long term, but don’t expect for this to happen any time soon.
With a fixed mortgage rate, your mortgage remains the same throughout the term of your mortgage. This could also provide more stability and peace of mind knowing you are staying within a fixed budget.
However, with recent changes to prime rate and unstable market conditions, people are finding it hard to continue with variable mortgage rates and some are even forced to break the loan before maturity and switch to a more feasible mortgage.
The question is, which fixed mortgage rate makes a better option?
While I can’t decide for you, I am happy to share my thoughts on the subject.
The best option perhaps is to go with a 3 year fixed mortgage rate. It’s not to long and it’s not to short. it’s somehow in between, so you are not stuck with the mortgage for a long time.
Ideally, you want to ensure the new mortgage combine the best rate and total flexibility with no bona-fide sales clause that restrict you from leaving the lender during the term in the event you decide to break the loan before maturity and switch lenders.
Need help comparing mortgage rates and options? Click here to compare current mortgage rates in Ontario.
About This Offer:
This article is brought to you by Mahmoud Hamdan (aka Mike) Licensed Mortgage Agent level 2. FSRA Lic # M09002218 since 2009. Brokerage: Mortgage Outlet Inc FSRA #12628.
Disclaimer: All offers are subject to lender qualifying criteria and E.&O.E.”