Mitigate your risk

With all the talk about possible impending interest rate increases in the new year, there is still a way to have your cake and eat it too. As it stands today lender are still offering deep discounts on variable rates. For example a AAA client purchasing and putting down less than 20% may get access to prime ( 2.45%) less 1.3%. This means your new mortgage would start at 1.15%. This is pretty sweet considering the same 5 year fixed rate is around 2.59%. So you start off at a discount of 1.44% compared to those who take the fixed rate.

While I have no crystal ball and can not predict what the governor of the bank of Canada may do. It would take quite a few interest rate increases to even meet the current fixed rate of 2.59%. This is because when the bank of Canada has moved the rates in the past they are normally at .25% at a time.

So the best way to mitigate your risk and get access to the best rates on the market ( for those who qualify), is to go variable and set your payment as if you took a fixed rate. So for example a 400K mortgage at 1.15% will give you a payment of $1,534.30 ( 25 year amortization as well). By setting your payment at the fixed rate of 2.59% you will pay 1,809.84. The $275.54 extra that you are paying goes directly towards your principal further reducing your mortgage by 4.3 years and saving you $10,726 in interest. There is a link to my mortgage calculator below, where it says mortgage app.

Today I am thankful for warm chocolate challah bread which was the best post workout snack ever, the opportunity to practice my french yesterday which always makes me feel better and Christmas music in every store.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here