Fixed Rate Mortgage vs. Variable Rate Mortgage

Which mortgage is the better way to go? Most people go for the fixed rate mortgage because it is the safe choice; it provides stability and gives the feeling of comfort knowing exactly what you will be paying on your mortgage for the fixed term.
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Fixed Rate Mortgage vs. Variable Rate Mortgage

Which mortgage is the better way to go? Most people go for the fixed rate mortgage because it is the safe choice; it provides stability and gives the feeling of comfort knowing exactly what you will be paying on your mortgage for the fixed term.
Read More

Fixed Rate Mortgage vs. Variable Rate Mortgage

Which mortgage is the better way to go? Most people go for the fixed rate mortgage because it is the safe choice; it provides stability and gives the feeling of comfort knowing exactly what you will be paying on your mortgage for the fixed term.
Read More

Fixed Rate Mortgage vs. Variable Rate Mortgage

Which mortgage is the better way to go? Most people go for the fixed rate mortgage because it is the safe choice; it provides stability and gives the feeling of comfort knowing exactly what you will be paying on your mortgage for the fixed term.
Read More

Fixed Rate Mortgage vs. Variable Rate Mortgage

Which mortgage is the better way to go? Most people go for the fixed rate mortgage because it is the safe choice; it provides stability and gives the feeling of comfort knowing exactly what you will be paying on your mortgage for the fixed term.
Read More

Fixed Rate Mortgage vs. Variable Rate Mortgage

Which mortgage is the better way to go? Most people go for the fixed rate mortgage because it is the safe choice; it provides stability and gives the feeling of comfort knowing exactly what you will be paying on your mortgage for the fixed term.
Read More

After fixed mortgage rates sat at a record low level for the past six months, it was inevitable that they would rise once again. The cause for this was the rise in Canadian Bond Yields, which was triggered two weeks ago. This was caused by a selloff in the Bond market due to The Federal Reserve indicating that they may slow down on the bond purchasing they have being doing to bring liquidity into the markets.  Nothing has actually happened yet and it may not even happen but the speech was enough to cause a selling frenzy.
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A handful of mortgage lenders started trimming the discount they offer on variable rate mortgage last week.  They have gone from prime -.75% to prime -.65% and in some cases prime -.50%.  So far four out the of the top ten mortgage brokers lenders have decreased rates.  The reason behind the tighten in the discount rate is the spreads that the lenders make on the product.  The product is not as profitable to the lenders as it once was.
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Just over two years ago when the credit crunch hit the Canadian economy the variable rate mortgage product went from prime -.75 or -.80 to prime + 1.00%.  Over the following years the lenders gradually began discounting the variable rate mortgage again, coming down from prime + 1.00% to prime + .60% to eventually today where it is averaging prime -.75%.  We are talking nearly 2 full points decrease.  As fixed rates were much higher in 2008 and 2009, taken a variable mortgage was still a good option.  However there is an opportunity now to take even more advantage of the variable mortgage rate.
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The Bank of Canada meet today to discuss the economy and future of interest rates.  As expected the prime/variable interest rate remained unchanged (bank overnight lending rate 1.00% and retail rate still at 3.00%).  A strong loonie and has kept inflation in check which is the driving force behind higher interest rates.  The Bank of Canada gave no indication of increasing rate over the short term.  Next meeting is May 31^st.  This is great news for the mortgage financing markets.  With variable rates as low as 2.25% this is a great time to be purchasing a new property or refinancing an existing mortgage to get a better interest rate.