With winter coming to a close (hopefully sometime soon) and spring on the way, we are moving into preapproval season. As people prepare for buying a home, one of the questions we get asked a lot is: Should I go fixed or variable? And that is a good question, but it is almost always answered with: It depends.
To go Fixed or Variable isn't advice that can be applied generically, the best mortgage product is the one that meets your individual needs!
So here is a table showing all our most recent mortgage rates and a some information that can help you figure out what mortgage product works best for you, fixed or variable.
Here are our current mortgage rates as of February Feb 24th 2014. You can always find our most recent rate table here.
It is hard to ignore that the majority of Canadians prefer a fixed rate mortgage.
For homes purchased in 2013, 82% had fixed rate mortgages, overall 66% of homeowners in Canada have fixed rate mortgages.
Looking at rates right now, the 5 yr fixed at 3.15% is really low compared to historic averages and provides excellent security for home buyers who are looking to stay put for a while. Not only that - it's portable, so you can take it with you just about anywhere (in Canada) if you need to move.
Our variable rate is currently calculated as Prime (3%) minus 0.55% for an end rate of 2.45%. With most economists predicting prime won't move until mid-late 2015, the Variable rate is somewhat attractive. According to an article in the Vancouver Sun:
"The bank said it expects Canadian inflation will "increase very gradually" to the ideal target of 2.0 per cent in about two years." Jan 22. 2014
Although there is savings to be had by going variable now over the next couple of years, compared to the fixed rate, the difference between rates is only 0.7%. We typically advise our clients that a difference of over 1% is where you would start to consider the variable rate compared to fixed.
Mortgage Rate Glossary
Mortgage terms can confuse even the most experienced home buyers, not to mention those new to the home buying process. Here is a mini glossary list that we have put together with links to important pages regarding mortgage interest rates!
If you have questions specific to your situation and would like to talk to a mortgage broker about your options, contact us anytime!