Receiving lots of questions lately, should I take a fixed rate mortgage Or a should I take a variable rate mortgage?

Great question and as you probably know, the Canadian mortgage market has been changing a LOT lately.

In fact, we’re seeing historically LOW Fixed rate mortgages and at the same time, we’re seeing deep discounted variable rate mortgages, virtually disappearing.

Not too long ago you could get A great variable rate mortgage at Prime minus .90, Or even a full point off.

Well, those days are gone for now.

The best variable rate mortgage right now Is Prime minus .15.

So your best variable STARTS At 2.85 and I say starts because as you probably know, Variable rates mortgages fluctuate with the banks prime rate, which is currently set at 3%.

The question then becomes, should you take a fixed 5 year mortgage at say 2.99 or a variable rate mortgage STARTING at only 2.85?

I would say, take the fixed mortgage rate.

Some people may argue that a variable rate mortgage only has a 3 month interest penalty, where as a fixed rate mortgage has either a 3 month interest penalty or the interest rate differential, whichever is the greater of the two.

What you have to remember is interest rate differential only becomes a factor in a declining interest rate environment.

Bottom line, if you’re selecting a fixed rate mortgage today at the bottom of the interest rate curve which is where we are, you typically don’t have to worry about the interest rate differential.

So my quick answer is, TODAY, go with a fixed rate mortgage.

As you can well imagine there’s a lot more to mortgages than just great rates.

For the right advice – at the right time

Go ahead and call me to discuss

Mark Fidgett, Your Vancouver Mortgage Broker For Life


P.S. Who’s the next person you know who wants to save thousands off their mortgage?
Be sure to give me a call so we can help them!