Brampton and Ontario Mortgage Blog
Fixed or variable mortgage rates: which is best when buying a home?
October 28, 2015 | Posted by: Roar Solutions
Paul Hunjan, mortgage broker, with Centum One Financial Group in Brampton knows there's a lot of information to process when you're buying a home.
Your lender will throw around a lot of terms when you're signing your mortgage, and without the right knowledge, you may make a choice that isn’t in your best interests. One of those decisions is whether to secure a fixed or variable mortgage rate.
If you're the type who doesn't mind a bit of risk that can really pay off, you may want to consider a variable rate — it's generally lower than a fixed rate, but if the mortgage rates rise (based on the bank's prime rate), you could see a spike in your mortgage payments or the amount you pay in interest per month.
If you're the type who stays awake at night worrying about things like mortgage payments, a fixed rate may right for you. You can lock in at a great rate for the term and not have to worry about the rates going up overnight. In other words, fixed rates are more predictable. However, you will pay a premium for this peace of mind.
Variable rates are influenced by the Bank of Canada's lending rates, while fixed rates are not. This can be good or bad news, depending on the economy. Right now, the Bank of Canada’s interest rates are at an all-time low (0.5 per cent) to stimulate investments in the economy, and economists expect that rate to stay put until 2017.
Keep this in mind when you're considering what type of mortgage to look for. Paul can help you navigate the process and find a lender that has the right mortgage products for you!
To find out more about how Paul can help you when buying a home, contact him at 416-820-8601, send him anemail or visit his website. You can also like Paul's page on Facebook for more updates.