Fixed Mortgage Rates
If you like the stability of knowing that your mortgage payment and interest will not change during your mortgage term, than fixed mortgage rates are for you.
Fixed mortgage rates don’t change. This means that when a lender approves your mortgage at a fixed mortgage rate, the mortgage rate and payment will stay the same for the term of your mortgage. Fixed mortgage rates are offered in a one year term mortgage, two year term mortgage, three year term mortgage, four year term mortgage, five year term mortgage, and some lenders are even offering ten year term mortgages. Generally speaking, more consumers choose fixed year mortgage rates on a 5 year term mortgage. 5 year term, fixed rate mortgages are very common.
Some people wonder what makes more sense, fixed rate mortgages or variable rate mortgages? This really just comes down to your appetite for risk and what you plan to do with the property you are purchasing. If you plan to live in the property for a long time and want the security of knowing that the terms of your mortgage won’t change, then fixed rate mortgage products are the best for you. With variable rate mortgages, if interest rates go up, your mortgage interest rate will change. This could impact your mortgage payment and the amount of interest collected with each payment.
When we shop for fixed mortgage rates for you we obtain the lowest fixed rate mortgage available and help you to secure a mortgage at an interest rate and terms that you can live with.
Variable Mortgage Rates
If you don’t mind taking a bit of a risk if the reward is the lowest available interest rate, or if you are mortgaging a property that you plan to sell in one or two years’ time, then variable mortgage rates may work for you.
Variable mortgage rates are lower than fixed mortgage rates. Variable mortgage rates are often the lowest mortgage rates that the bank offers. When interest rates are at historic lows, variable mortgage rates make good sense. You must however be aware that as the economy improves variable mortgage rates are subject to increase if the Bank of Canada increases its prime lending rate.
There are mortgages that bear variable mortgage rates that offer you options if interest rates do go up. For example, if interest rates do go up and you are notified that variable mortgage rates will increase then you can lock-in your mortgage to a fixed mortgage rate if you have a mortgage that permits you to do so.
If you plan to stay in your home for many years and don’t want to have to worry about interest rates going up, fixed rate mortgages may be better suited to you.