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Orginally posted by kam64

Hi Pramod,
Thanks for your valuable advise to this forum.
My mortgage is due in March and I am with scotia.
They are willing to extend the deal & offering me 5 years variable and prime minus .85.
Shall I go ahead! Need your expertise please.
Thanks.

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Hi Kam64,

Sorry for delay in replying to your question as I was away vacationing in India and only came back recently.

The variable rate you are being offered by Scotia is a good rate as they would like to keep you as a client and not like you to switch any where else. However, I would like to add here that one should chose the variable product only if they are comfortable with the 'payment shock' as the payment may change with the change in 'prime rate'. Secondly, your bank may offer you a better rate right now in order to keep you with them but you may lose out big when in future you want to lock in for 'fixed rate' as at that point of time you would have to again negotiate for the fix rate and it is unlikely that you will get the 'best discounted' rate as you are already stuck with them and would have to pay out the penalty for switching if you do not like their fix rates. On the other hand, variable mortgage product offered by the 'mortgage brokers' gets you a 'guaranteed best discounted' rate at the time of locking in for fix rates. And, you do not pay any charges if you switch mortgage at the time of renewal.

You can contact me for further details on variable products and best options available to you.

Good Luck.