If you're on the fence about whether or not you should choose a variable or a fixed interest rate, then this is the article for you.
On my last post, we talked all about variable interest rates, the two different kinds that you can obtain, and the important features that you need to be aware of if you're going to choose a variable interest rate.
With that in mind, a lot of people are still on the fence about whether a fixed or a variable interest rate is right for them as for each individual situation, the choice is going to be different.
So, today's article is dedicated to fixed interest rates, the important things you need to know about them, why you might choose one, and the important features and differences between one lender and the other when it comes to fixed interest rates.
If you're thinking about taking a variable interest rate, you're going to want to read this blog post.
With the prime rate dropping, variable interest rates are coming back into the fold, and a lot of homeowners and first-time buyers are beginning to inquire about taking on a variable interest rate instead of the fixed.
Now there is some risk involved in taking on a variable, but there's also some important features that we need to know about if we're going to consider a variable interest rate.
So let's dive in.
To begin, what a lot of Canadians don't know is…
Earlier this month, the Bank of Canada made another jumbo rate cut of half a percentage point (0.50%) off the prime lending rate. Let's take a look at what this means for you as a current or future homeowner, as well as what this means for the state of our economy in Canada.
To begin, if you have a variable rate mortgage, since June you've seen your interest rate be cut by 1.75%, which is a major drop in interest rate.
To put this into context, what this means is that for every $100,000 of mortgage money that you currently owe on…
Is your mortgage coming up for renewal soon? If so, this is blog for you.
Earlier in the year, Canada's banking regulator, OSFI, made an announcement that they were going to remove the stress test qualifications for all insured mortgages coming up for renewal.
The purpose behind this was to help increase competition for homeowners so that they are not locked into their existing lender and can shop around with their mortgage broker to find a better interest rate.
This is great news for anybody who is looking to shop around and get a better interest rate, but only for those…
2023 was another consecutive year of rising interest rates as we grappled with getting a hold on inflation.
However, the end of last year showed some light at the end of the tunnel. Due to inflationary numbers coming in much better than expected, Bank of Canada (BoC) choose not to continue the pattern of additional increases to the prime lending rate for all of last quarter avoiding further increases to variable rate holders.
To compete for business, banks will often incentivize homeowners by offering either cash-back or cash bonuses to earn their mortgage business.
This isn’t just a way of earning business, but by dangling a carrot and getting you focused on the cash it steers the conversation away from the fine print and important features of the mortgage that could easily cost you more money in the long run.
If you’re planning to purchase a vacation property, pay for children’s education, or require cash to cover a sudden expense, then pulling equity from your home through refinancing can be a good option.
When it’s mortgage renewal time, many people just simply sign that renewal letter they will get in the mail from their lender. While there’s nothing wrong with that approach, mortgage renewal is a fantastic time to find a better deal, save money and take advantage of mortgage features and products that may be better suited for you.
When someone chooses a five year fixed mortgage term for their home financing, more often than not it is for one simple reason – security. A fixed interest rate provides the comfortability of knowing that your interest rate, and therefore your regular payment, will not change for the life of the mortgage term typically 5 years. For this simple reason, this is the default choice for many homeowners when shopping for a mortgage rate. But what if I told you that if you broke that fixed rate early you would be looking at a drastic penalty that will equate to around 4.5% of your mortgage balance? This would maybe make you wonder if there was another option that provided a stronger protection against the changes of life.
After the whirlwind year of 2020, making your finances work for you is already top of mind for Canadians. Why not roll that into a brand-new resolution moving forward into 2021? Here are some ideas to make your finances work for YOU in the New Year:
Whether you’re buying your very first home, purchasing a vacation or investment property, or renewing or refinancing an existing mortgage, there are many considerations to make along the way.
And with the many changes we’ve experienced in mortgage qualification rules, it has never been more important to rely on the expertise of a licensed mortgage broker to guide you through the homebuying and financing processes.
I’m Cody Rowe, a mortgage broker from Victoria, British Columbia. I specialize in working with first-time buyer purchases, those with bruised or poor credit, and alternative financing. I began operating as a broker four years ago but previously worked for Scotiabank as a Financial Advisor, and as a Supervising Agent in the insurance industry. My knowledge and expertise is based on experience in various roles within the financial industry and has allowed us to provide creative solutions for clients.
