Is this a good rate?

Lender PCF (cibc)

VRM – 5 year closed at prime – 0.75%

Quote:

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Originally posted by quest

Is this a good rate?

Lender PCF (cibc)

VRM – 5 year closed at prime – 0.75%

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Dont go with Variable. - Go with Fixed for 5 years- its time to fix the rate... rate will jump every now and then ....

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'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)

This is a very unqualified statement..

Historically variable has always been better than fixed and at todays prime variable is still very attractive.

1>
Going variable depends on once ability to take and absorb risks.. If u go and do a averaging of the rates for the past 10 years compared with todays fixed rate u will probably find the difference is only marginal..

2>
At prime minus 0.7 i will go variable because the spread between fixed and variable is around 2% and for the prime to move up 2 % it will take well over 2-3 years by which time u would have made enough in the difference.


3>
Variable mortages can be closed by paying 3 months interest where as fixed mortagage u may end up paying interest differential which may work out to 5000$ per 100000 in mortgage.


If u like the house go get it dont delay because u expect the variable to fall prime minus -.9 .. if anything go to a mortgage broker he may be able to give u a better deal than the bank

Quote:

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Originally posted by Blue_Peafowl

Dont go with Variable. - Go with Fixed for 5 years- its time to fix the rate... rate will jump every now and then ....

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Thanks ashedfc, have 1 question regarding "fixed monthly payment with a variable rate "
so if I take the max amortization for 35 years with a fixed variable rate, and if the interest rate goes up, will the amortization be more than 35 years?

U cannot ask for a fixed monthly payment with variable..

The bank automatically tries to keep ur payment as fixed as a possible, without changing amortization.

What i mean is your payment is interest + principle. so the bank changes the principle component as the interest changes.. If the interest rate drops priciple payment is increased and only a part of the benefit is passed back , if the interest increases the principle is decreased.

Quote:

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Originally posted by quest

Thanks ashedfc, have 1 question regarding "fixed monthly payment with a variable rate "
so if I take the max amortization for 35 years with a fixed variable rate, and if the interest rate goes up, will the amortization be more than 35 years?

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Quote:

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Originally posted by dudewheresmycar

This is a very unqualified statement..

Historically variable has always been better than fixed and at todays prime variable is still very attractive.

1>
Going variable depends on once ability to take and absorb risks.. If u go and do a averaging of the rates for the past 10 years compared with todays fixed rate u will probably find the difference is only marginal..

2>
At prime minus 0.7 i will go variable because the spread between fixed and variable is around 2% and for the prime to move up 2 % it will take well over 2-3 years by which time u would have made enough in the difference.


3>
Variable mortages can be closed by paying 3 months interest where as fixed mortagage u may end up paying interest differential which may work out to 5000$ per 100000 in mortgage.


If u like the house go get it dont delay because u expect the variable to fall prime minus -.9 .. if anything go to a mortgage broker he may be able to give u a better deal than the bank

Quote:

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Originally posted by Blue_Peafowl

Dont go with Variable. - Go with Fixed for 5 years- its time to fix the rate... rate will jump every now and then ....

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'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)