Comments on: Fixed or Variable Rate Mortgage? http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm The Canadian Source For Personal Finance Tue, 16 Mar 2010 19:37:21 -0600 http://wordpress.org/?v=2.9.2 hourly 1 By: Sue http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-4005 Sue Sat, 06 Mar 2010 16:30:21 +0000 http://canadianfinanceblog.com/?p=165#comment-4005 I understand and agree with the info above. But right now I am looking for advice about if or when I should switch from the variable rate mortgage I already have to a fixed rate. We bought the house just under 2 years ago. The variable rate is prime minus .25%, so right now our interest rate is 1.9. What was originally set up as a 40-year mortgage now has less than 20 years remaining. But if interest rates go up again, the remaining time on the mortgage will increase, and depending how high they go, the payment may need to be increased to compensate. Common sense says interest rates will not go lower. My question is, if we are still benefitting from the lower, variable rate, how much higher should I let them go before we lock in?? I understand and agree with the info above. But right now I am looking for advice about if or when I should switch from the variable rate mortgage I already have to a fixed rate. We bought the house just under 2 years ago. The variable rate is prime minus .25%, so right now our interest rate is 1.9. What was originally set up as a 40-year mortgage now has less than 20 years remaining. But if interest rates go up again, the remaining time on the mortgage will increase, and depending how high they go, the payment may need to be increased to compensate. Common sense says interest rates will not go lower. My question is, if we are still benefitting from the lower, variable rate, how much higher should I let them go before we lock in??

]]> By: list mortgages http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-3907 list mortgages Tue, 02 Mar 2010 14:43:07 +0000 http://canadianfinanceblog.com/?p=165#comment-3907 especially in these financial times it is a good idea to research what banks are offering and find the best fixed rate mortgage with the lowest interest rate. If you are unsure about some of the procedures with the mortgage re-payments talk to a independent advisor or find out more information on this site. .-= list mortgages´s last blog ..<a href="http://www.listsmortgages.com/a-summary-of-mortgage-fees/" rel="nofollow">A Summary of Mortgage Fees</a> =-. especially in these financial times it is a good idea to research what banks are offering and find the best fixed rate mortgage with the lowest interest rate. If you are unsure about some of the procedures with the mortgage re-payments talk to a independent advisor or find out more information on this site.
list mortgages´s last blog ..A Summary of Mortgage Fees

]]> By: Tom http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-3300 Tom Fri, 29 Jan 2010 07:07:51 +0000 http://canadianfinanceblog.com/?p=165#comment-3300 Chris, It will certainly be interesting to see what the rates do in the future, only then will we know for sure if we both made the right choice. My guess is that we did! Chris,
It will certainly be interesting to see what the rates do in the future, only then will we know for sure if we both made the right choice. My guess is that we did!

]]> By: Chris Martin http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-3239 Chris Martin Sun, 24 Jan 2010 01:46:57 +0000 http://canadianfinanceblog.com/?p=165#comment-3239 I'm currently looking to buy a home and have decided to go with a 10 year fixed @ 5.45. I've figured that with the early payment options I can have it paid off in full within 8 years anyway. To lock in such a low rate gives me security for a decade should I get laid off again. When applying they try to push a 6 month convertible on you. It's obviously a trap as I know as well as they do that 6 months from now interest rates will be on the rise. Alarm bells rang because of the tenacity with which they were selling this 6 month variable to 5 year fixed option. I’m currently looking to buy a home and have decided to go with a 10 year fixed @ 5.45. I’ve figured that with the early payment options I can have it paid off in full within 8 years anyway. To lock in such a low rate gives me security for a decade should I get laid off again. When applying they try to push a 6 month convertible on you. It’s obviously a trap as I know as well as they do that 6 months from now interest rates will be on the rise. Alarm bells rang because of the tenacity with which they were selling this 6 month variable to 5 year fixed option.

]]> By: Kevin@OutOfYourRut http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-3237 Kevin@OutOfYourRut Sat, 23 Jan 2010 20:22:23 +0000 http://canadianfinanceblog.com/?p=165#comment-3237 Right now I have to think fixed rates are the instinctive choice. They're below 5% and haven't been this low since the 1930s! Now would be the time to lock these rates in. The reason people have benefited from ARMs in the majority of cases is that rates have been falling for the past 25 years. A reversal of the trend- a 10 or 20 year trend toward rising rates - would put holders of ARMs in the worst possible position. When I got into the mortgage business, people were taking ARMs as relief from rates above 15%. Why would anyone do that with fixed rates below 5%??? (???) .-= Kevin@OutOfYourRut´s last blog ..<a href="http://outofyourrut.com/blog/2010/01/23/buying-vs-renting-a-home-not-all-about-money/" rel="nofollow">Buying vs Renting a Home – Its Not All About Money</a> =-. Right now I have to think fixed rates are the instinctive choice. They’re below 5% and haven’t been this low since the 1930s!
Now would be the time to lock these rates in.

The reason people have benefited from ARMs in the majority of cases is that rates have been falling for the past 25 years. A reversal of the trend- a 10 or 20 year trend toward rising rates – would put holders of ARMs in the worst possible position.

When I got into the mortgage business, people were taking ARMs as relief from rates above 15%. Why would anyone do that with fixed rates below 5%??? (???)
Kevin@OutOfYourRut´s last blog ..Buying vs Renting a Home – Its Not All About Money

]]> By: John Forbeson@mortgage refinance rates http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-2579 John Forbeson@mortgage refinance rates Sun, 06 Dec 2009 03:35:56 +0000 http://canadianfinanceblog.com/?p=165#comment-2579 It's great reading this information from other countries around the world. All the trends seem to be going a similar way in many countries including Australia. Thanks for the post. It’s great reading this information from other countries around the world. All the trends seem to be going a similar way in many countries including Australia. Thanks for the post.

]]> By: Friday Links | The Canadian Finance Blog http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-1378 Friday Links | The Canadian Finance Blog Fri, 02 Oct 2009 09:04:28 +0000 http://canadianfinanceblog.com/?p=165#comment-1378 [...] Highway included Fixed or Variable Rate Mortgage? in this week’s Carnival of Pecuniary [...] [...] Highway included Fixed or Variable Rate Mortgage? in this week’s Carnival of Pecuniary [...]

]]> By: Carnival of Pecuniary Delights – Welcome to Canada Edition, eh! | Financial Highway http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-1364 Carnival of Pecuniary Delights – Welcome to Canada Edition, eh! | Financial Highway Thu, 01 Oct 2009 10:06:17 +0000 http://canadianfinanceblog.com/?p=165#comment-1364 [...] Tom @ Canadian Finance Blog from The Canadian Finance Blog presents Fixed or Variable Rate Mortgage?. [...] [...] Tom @ Canadian Finance Blog from The Canadian Finance Blog presents Fixed or Variable Rate Mortgage?. [...]

]]> By: Carnival of Debt Reduction » Four Pillars has posted this week’s Carnival http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-504 Carnival of Debt Reduction » Four Pillars has posted this week’s Carnival Wed, 24 Jun 2009 05:10:44 +0000 http://canadianfinanceblog.com/?p=165#comment-504 [...] The Canadian Capitalist discusses the difference between fixed and variable-rate mortgages. [...] [...] The Canadian Capitalist discusses the difference between fixed and variable-rate mortgages. [...]

]]> By: Silicon Prairie http://canadianfinanceblog.com/2009/03/12/fixed-or-variable-rate-mortgage.htm/comment-page-1#comment-60 Silicon Prairie Sun, 15 Mar 2009 15:55:17 +0000 http://canadianfinanceblog.com/?p=165#comment-60 I agree that this is a big consideration. Predictions over that time period aren't worth much, but rates can go up 5% a lot more easily than they can go down 5%. I don't know if the fact that variable rates are now set to be higher than prime rates makes a difference - by the time they come down again the interest rates might have already gone up - but that's another issue. Even if rates do go up, geting a mortgage now could add 1% to your interest rate for the whole term. I agree that this is a big consideration. Predictions over that time period aren’t worth much, but rates can go up 5% a lot more easily than they can go down 5%.

I don’t know if the fact that variable rates are now set to be higher than prime rates makes a difference – by the time they come down again the interest rates might have already gone up – but that’s another issue. Even if rates do go up, geting a mortgage now could add 1% to your interest rate for the whole term.

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