FIXED RATE MORTGAGES

The principle advantage of fixed rate mortgages is that the interest rate is set for the entire term of the mortgage. A fixed rate mortgage offers you the security of knowing exactly how much principal and interest you will be paying on your mortgage during the term you selected. If you think interest rates will rise, you may want to lock into a longer term fixed rate mortgage but if you think that the rates may fall, a shorter term may be the best choice for you.

Keep in mind that with a fixed rate mortgage you are locked in for the selected term, and that you may incur a penalty to break your mortgage.  There are several types of fixed products on the market, it is important to know what you are signing up for and what type of flexibility your mortgage provides.  Some lower rate fixed mortgages are considered no frills mortgages and these are very limited in pre-payments, early payouts and porting.  A no frills mortgage could end up costing you a lot of money if you need to pay it out early.  We make sure our clients know exactly what type of mortgage they are getting and can make an informed choice of what mortgage product makes sense for them.

VARIABLE RATE MORTGAGES

Depending on the level of risk you are willing to take, a variable rate mortgage can save you money while keeping your options open during times of fluctuating interest rates.

With variable rate mortgages your mortgage payment could increase or decrease depending on fluctuations in the Prime rate. With most variable rate products you can lock in at our discounted rate (not bank posted rates) anytime during your term.  Variable rate mortgages are recommended for the more savvy mortgagee or for those that have room in their monthly budget to handle an increase in the Prime lending rate.  They are a great way to take advantage of the lowest rates available on the market today.

TROUBLE DECIDING?

If you are having trouble deciding between today’s low fixed interest rates and a variable mortgage it will be important for you to weigh the pros and cons of each.  We are always available to discuss the options and make sure that you have enough information to make an educated decision.  A basic rule of thumb would be if you can’t afford an increase in monthly payments or do not like the feeling of being unsure of what your payment may be in the future, you are probably best to lock into a fixed rate. For further information on this, please contact us, we would be happy to answer any questions you may have.
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