Switch to Variable or Stick with 5.00% fixed
Jump to Page:
< Previous [ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ] [ 6 ] [ 7 ] [ 8 ] Next >
Location: carl sagan's universe
Posted on: 08-03-09 18:39:30
Quote:
Originally posted by Nightmare
My mortgage is due for renewal in April.
My banker offers m 3.5% variable rate for 3 years. Is it good? Should I go for 50% variable and 50% Fixed?
variable closed for 3 years?
At any rate, many are opting for a closed 4 or 5 year term. The difference on the mortgage payment between a variable at Prime + .8 and a closed at 4.18% is about $120 a month. which translates to $1440 a year.
However many think that rates are at rock bottom (BoC overnight is at .5%) and that the most logical sequence to the recent lowering of rates is that rates will go up in the near future w/in a year (nobody knows for sure but people base it on what the media is saying) and that their variable might surpass the 4.18% and all told they feel it is better to take the fixed for budgeting purposes.
Caution1. However I should caution you that historically the variable rate mortgage has proven more beneficial than the fixed.
Caution 2.Also another cautionary note- caution 1 is based on fixed always being above 5.5% until recently, so many are suggesting that with the fixed rates so low, it is better to go fixed, as many see inflationary catching up and prime rates may go to 6 % again w/in 2-3 years.
So the ball is in your court.
If the variable you get is open- i.e switchable to 5 year fixed at anytime sans penalty- then go for it. Certain banks are offering variable at Prime + 1 and may bargain down.That is currently the best option in my opinion.
THEY HAVE LIMITED ME TO A LETTER A DAY. THE NEXT ONE CANNOT BE SENT OUT BEFORE THE NEXT TWENTY FOUR HOURS AND A MINUTE IS OVER.
Sorry about it.
Freddie.
Please see if he rates provided match the other posted ones on different websites, or even better. Also you should call and ask if they have been updated. Because some of the brokers have not done so.
Here is a link to one of them: http://www.mortgagediligent.com/rateadvisor.aspx
Dicker with them as there is room for dickering and get them down, if you can.
Good Luck.
Freddie.
Although rates are at rock bottom i dont think the government will touch the rates for another 2 years.
Variable int at a lower rate still wins over fixed rate.
Hi Pramodji,
I have a balance mortgage of approx 222000 at a fixed rate of 5.09 for the balance 3 years and 3 months
I have been offered below option to switch
a) 100K mortgage - % (Prime + 1 ) Open for 5 years. Open Option to move to fixed
b) Balance - 4.29 fixed for 1 year (and with some gaurantee to get the best rate after 8 months)
c) Penalty for approx 6300 will be absorbed by the new lending bank
My monthly payment is going down by about 200
Can you help me out with the calculations, and is it worht doing this change?
Regards
gforacle
Quote:
Originally posted by gforacle
Hi Pramodji,
I have a balance mortgage of approx 222000 at a fixed rate of 5.09 for the balance 3 years and 3 months
I have been offered below option to switch
a) 100K mortgage - % (Prime + 1 ) Open for 5 years. Open Option to move to fixed
b) Balance - 4.29 fixed for 1 year (and with some gaurantee to get the best rate after 8 months)
c) Penalty for approx 6300 will be absorbed by the new lending bank
My monthly payment is going down by about 200
Can you help me out with the calculations, and is it worht doing this change?
Regards
gforacle
If your new lender is 'absorbing' (and not adding in to the new mortgage) the penalties worth $6300 then it would make this a worthwhile deal, even though the rate for 1 year term is much higher than available elsewhere. Essentially the new lender is loading a part of penalty in the new 1 year term making it a higher than the best rate available but still it is a good deal.
-----------------------------------------------------------------
Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Originally posted by ftfl
Please see if he rates provided match the other posted ones on different websites, or even better. Also you should call and ask if they have been updated. Because some of the brokers have not done so.
Here is a link to one of them: http://www.mortgagediligent.com/rateadvisor.aspx
Dicker with them as there is room for dickering and get them down, if you can.
Good Luck.
Freddie.
I have been offered 3.3 for variablr by Scotia (not my current banker) and 4.19% for 4 year fixed.
I went to the site provided in link and speak to the broker as their rates for 5 yr fixed are more competitive. I have pasted rates below from broker's site.
Thanks for help
Prime Rate 2.50%
Variable Rate 3.30%
1 year Fixed 3.25%
2 year Fixed 3.84%
3 year Fixed 3.99%
4 year Fixed 3.99%
5 year Fixed 3.94%
7 year Fixed 4.95%
10 year Fixed 5.15%
