Choosing the Best Mortgage Rates
Even though the idea of a variable rate mortgage is not a new thought in Canada, there are more kinds now than ever before that you should familiarize yourself with. This kind of mortgage is evolving constantly to provide a better match for each person and their situation. If you work with a lender who is willing to tailor your mortgage needs to fit you perfectly, you will have a better experience now and benefit from greater savings in the future. With more options of variable rate mortgages to choose from comes the importance of research to discover which kind will work best for you.
Before you choose one mortgage over another, be sure you have an understanding of your personal financial plans. There are professionals available who specialize in assisting their clients in the process of choosing the best kind of mortgage. They promise to help you achieve your financial goals and eventually reach freedom from mortgages. A standard with any kind of variable rate mortgage is that they are all affected by the prime rate and usually last for a five-year term. These standards are beneficial because they allow you to obtain a secure mortgage while not compromising flexibility.
How do you know if a variable rate mortgage is even right for you? What about fixed rate mortgages? The current posted rate for five-year fixed mortgages is 5.85%. Companies offering lower rates, but not ridiculously low rates like 2.01% or similar that are prone to be raised after an introduction period, are clearly good deals. You know a variable rate mortgage is likely the best option for you if you are content with irregular monthly payments when prime rates move and if you need a mortgage you can break without penalties after three years of the term has elapsed. Additionally, despite what fixed rates are doing, a variable rate mortgage can deliver lower interest rates. If your credit is clean and you either have 5% down on a new property if you are buying or 10% equity built up if you are refinancing, these are signs you could benefit from a variable rate plan as well.
Watch for companies that advertise incredibly low interest rates because these undoubtedly serve as introductory rates only. Within the five-year plan, your rate may boost quickly up to prime-lending rates, meaning you may end up losing money in the long run. Ask these kinds of questions about variable rate mortgages before you sign up for anything. Get more questions answered, speak to one of our Mortgage Experts today by filling out the info below for a Free Mortgage Quote!