Point of no return
There are still many of us still riding out on a variable rate mortgage, even though there have been 5 rate changes this year and the strong possibility of another one soon. At the time it was the easiest decision out there as rates were low and the fixed rate while still low was about a percent and a half higher than the discounted variable rate.
Now there are a few things that those of us still on a variable rate should be aware of. These are the Trigger Point and the Trigger Rate. Firstly the Trigger Rate is the point that you are no longer paying interest and principal on your mortgage but only paying interest. Meaning that you are no longer paying it down. The Trigger Point is when the balance on your mortgage now exceeds the amount of your original principal due to the increase of mortgage rates.
Hitting the Trigger Rate may not warrant a call from your lender, however hitting the Trigger Point mostly likely will. This is because your mortgage now exceeds the initial principal balance and since you were no longer paying interest & principal your loan was increasing due to the fact that the increasing rates and your set payment no longer covered the new interest on the loan.
Solution now would be to simply increase your payments to bring it back below the trigger point or switch over to a fixed rate so you are paying both interest & principal. Feel free to give me a call if you are in this situation.
Today I am thankful for the schools finely being open again here in Halifax, quick solutions and partners who stepped up to help solve it and invitations from colleges to attend events.
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 Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).
p.s.s.s You can download my new mortgage app here
