When it comes to selecting a rate, there are two options for your purchase, refinance, or renewal. Those options are a fixed rate or a variable rate.
A fixed rate lets you “set it and forget it” for a peace of mind. The rate you lock in on your commitment will be the same throughout your entire term, meaning your payment will never change. Most fixed mortgage policies allow you to “port” your mortgage to a new home. Typically fixed rates run higher and come with a larger penalty to break your policy than that of variable rates. These rates are ideal for people who want a consistent mortgage budget with little risk.
A variable rate increases and decreases with Bank of Canada’s prime rate, depending on economic circumstances. Variable rates are often lower than fixed rates and come with a substantially lower penalty (3 months of interest + discharge). Historically variable rates have been correlated to more savings, and you’re able to switch to a fixed-rate at any time if rates begin to rise. These rates can be very beneficial for those who enjoy flexibility and those with a higher risk appetite.
Let’s chat about your best option today!
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