With the most recent move by the bank of Canada, it may be time to look at the age old dilemma of fixed vs variable mortgages. Sure over the past few years it made mathematical sense to take and stay with a variable rate mortgage. However the tides may have turned and it is an ideal time to look at this again and see if the numbers favour fixed or variable.
Currently the prime rate is at 6.45%. If your mortgage is insured ( CMHC, Sagen or Canada Gurantee) you will have a discount to prime of between .90 to 1.10 depending on the lender and when you took it out. This will put you around 5.45% for your current mortgage which is now above the 5.25% stress test rate that you qualified when you took out the mortgage.
So depending on your lender you may be able to switch to a fixed rate which would be much less than staying with the variable. So if that is the case then the math will work in the favour to switch. However some of the big 5 banks only offer the discounted rate at the start of the term and in those cases to switch out of variable will have you paying more. Do the math and see what makes the most sense to you.
Today I am thankful for all the birthday wishes from my kids, my family and my friends, a great workout to start the day and all the opportunities in front of me.
I look forward to hearing from you in regard to your mortgage needs.
p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).
p.s.s.s You can download my new mortgage app here