Comments on: Keep Line Of Credit Or Switch To Fixed Rate Mortgage?

By: TC

TC — Sun, 07 Mar 2010 13:46:44 +0000

My husband and I have just purchased a condo unit as a rental investment and we are deciding whether to use a line of credit (LOC) or a variable rate mortgage (VRM). From the viewpoint of cash flow, LOC will give us the best flexibility if the unit is vacant and we won’t need to commit to a fixed monthly mortgage payment except for the LOC interest. As well, the monthly interest will be tax deductible since it’s an investment. On the other hand, VRM has a very attractive rate making it hard to ignore, as Mtg Guy has mentioned above.

By: del sur mortgages

del sur mortgages — Wed, 03 Mar 2010 12:08:05 +0000

With the delicate state the financial market is meant to be in, it’s not a bad way to think of securing a fixed rate so if there was a re-lapse in the market then the mortgage would not be in a bad state.
del sur mortgages´s last blog ..Interest-Only Or 50 Year Mortgages – Do They Really Make

By: Mtg Guy

Mtg Guy — Thu, 25 Feb 2010 23:11:35 +0000

For me, personally, I would take a Variable Rate mortgage, which right now are priced as low as 1.85% This is too low of an interest rate to ignore when there is no upward pressure on rates at this point. Ride the VRM until we hear that rates may rise, then at that point lock in to a fixed-rate at whatever term you like. This way you are maximizing your time at a low interest rate. There is no sense in paying a 2 point premium on the fixed rate at this time.
The downfall to the Line of Credit is that you are paying a higher premium for a product that has just about all the same features as a VRM.
Just my opinion.

By: Home Insurance Quotes Blog

Home Insurance Quotes Blog — Thu, 04 Feb 2010 22:54:38 +0000

The biggest benefit of a fixed rate mortgage is that you will know precisely what your mortgage interest and principal payments are going to be and hence plan your budgeting in accordance.

By: John

John — Fri, 15 Jan 2010 20:27:53 +0000

The interest rates on a morgage is calculated monthly. Most line of credit intrest is calculated daily, making straight percentage comparisons imposible. The only way to get a handle on the comparison is to crunch the actual numbers then recalculate the interst using the cost of borrowing.

By: Debt Reduction Articles

Debt Reduction Articles — Mon, 21 Sep 2009 15:44:59 +0000

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By: Debt Reduction Tips - Carnival of Debt Reduction

Debt Reduction Tips - Carnival of Debt Reduction — Sat, 12 Sep 2009 06:44:06 +0000

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By: cy

cy — Sat, 29 Aug 2009 18:22:30 +0000

even if prime hits 3.85 or a bit higher in a year or two, you’ve still saved a little money during all the months you were paying 2.25. so prime would have to go up pretty fast and soon for the 5 year to benefit you. i’d lean towards the variable, even though it’s a little riskier. the truth is that i’d be more concerned anyway about what’s going to happen in year 6 etc. Even the 5 yr doesn’t protect you for that long so you might as well take advantage of the 2.25 while you can get it.

By: mfd

mfd — Thu, 27 Aug 2009 17:25:19 +0000

3.85% is a good rate. I personally believe rates but be this low forever. However I would lock in simply for the stability factor. I like to know exactly how much my bills are going to be every month.