Considering a Variable Rate Mortgage?
Interest rates are still near historic lows and variable rate mortgages continue to be a go-to for Canadians. Certainly variable rate mortgage holders need to stay cognizant of interest rates and where they are headed, however there are other considerations when deciding if a variable rate mortgage is best. Consider this:
- What is the right variable rate product? With so many variable rate mortgages, not all are created equal. Many have different terms, conditions and back-end regulations not always allowing you to get out easily.
- What term length makes the most sense? A 5 year, 7 year or 10 year term are options to explore. Have your mortgage professional calculate the payments and be thoughtful of your budget and amortization goals.
- What is my risk tolerance? Can you sleep at night known your mortgage payments could change? What can you afford?
A few good rules of thumb as you acquire a variable rate mortgage:
- set a benchmark ahead of time for when you want to lock in
- have your payments set to the current 5 year fixed rate you would have paid. That way more money is going towards your principal and you can budget based on a higher mortgage payment. If rates do go up, you will be in a better position to adjust.
Of course evaluating the differences in the rates and products can be very complicated. Our mortgage professionals have the expertise to provide your best options.
Give us a call now, we’re here to help 1-800-687-9020