Variable Rate Mortgage Solutions
When deciding on which mortgage solution is right for you, a variable rate mortgage might be more beneficial based on your financial situation and current economic outlook as dictated by the Bank of Canada.
A variable rate mortgage is calculated based on prime rate, which is usually lower than fixed rate. Variable rates are compounded monthly and have fixed payments. Changes in interest rates also determine how the payment is applied to the mortgage. For instance, if interest rates increase, more of the interest gets paid, and if interest rates decrease, the payment is applied to the principal.
Another benefit to having a variable rate mortgage is the flexibility it offers. For instance, if you were to break the contract, the penalty is much less. Five-year variable rate mortgages have also been known to give the borrower more savings in the long run.
If you are interested in finding out about variable rate mortgages, including rates and penalties, our mortgage experts can help, and provide you with the best variable rate mortgage solutions available.