So, why should you choose a variable rate mortgage vs a fix rate mortgage?
To save money of course!
Since variable rates have been traditionally lower than fixed mortgage rates some borrower in this dates may choose to select a variable rate mortgage, however that may not be the best option in this August 2019.
Click here to check out today’s mortgage rates and compare it for yourself, the rates are incredibly low right now
Choose wisely, get the right advice
Scenario:
John & Mary are looking for a 5 years term, amortized in 25 years $500,000.00 mortgage, their uncle recommended to get a variable rate mortgage, if they choose that, their monthly payments at a current variable rate of 3% (prime -.95%) will be $2,366.23, and their balance after 5 years will be $427,372.90 (with the possibilities that the Bank of Canada lowers the rate during the 5 years term to an unpredictable rate
If they select a 5 years term fixed mortgage rate, their monthly payments will be $2,212.53, and their balance after 5 years will be $422,248.69
Calculate your mortgage payments here
