Mortgage Advice: What's best for you? Variable or Fixed?
I met with Jessi Johnson of the Jessi Johnson Mortgage Team to discuss the pros and cons of a Fixed Rate Mortgage versus a Variable Rate Mortgage.
Fixed Rate Mortage:
A fixed rate mortgage has a set interest rate that does not change over the life of the mortgage. The interest rates for these mortgages are set by the international bond market. The interest rate (and the amount of interest paid) on a fixed rate mortgage tend to be higher than a variable rate mortgage.
Variable Rate Mortgage:
A variable rate mortgage has an interest rate that changes in line with the Bank of Canada’s prime rate.Variable rate mortgages tend to have a lower interest rate than a fixed rate mortgage, but the interest rate on a variable mortgage can change at any time.
Well, that depends. If the possibility that your mortgage payments could increase (maybe drastically) keeps you awake at night, then the certainty of a fixed rate mortgage might be the best option for you. If you’re comfortable with some changes in your mortgage payment and like the lower interest costs that are sometimes associated with a variable rate, then this mortgage might be the right product for you.
PLEASE NOTE ** I’d love to hear your thoughts and questions in the form of a comment. Click this link to my mortgage advice blog pages and scroll down to the comments section. I always reply!