Hi,

Please advise which is a better option :

Mortgage amount $1M

Period : 5 Years


a. 5 Years Fixed : 2.35 (HSBC)

b. 5 Years Variable : 2.10 (Meridian Credit Union)


Thanks

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Fido.

Hi Fido,

Between these two, 2.35 fixed sounds better. When rate difference is more than .5 then people normally go with variable.

A colleague did a small calculation .

(2.35-2.10) or .25 *1M=$2500/-


With variable 2.10 option (worst case)

In case the prime rate stays same for 2 years : +$5000/-

In case it rises 25 basis points after 2 year : $0/-

In case it rises 25 basis points after 1 year : -2,500/-

Plus Variable generally has a more flexibility in case of a breakage in between.



Seeking more opinions please urgently as I have to decide very soon ...


Thanks.

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Fido.

Fixed 2.35 if job is steady and won't be breaking the Mtg.

otherwise 2.15 Variable if worried abt penalties and breaking MTg

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America Ka Vyapaari Canada Ka Bhikari

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If your VRM is a closed one then it will have penalties attached unless if it's a open VRM. Though with a closed VRM you should be able to convert to a fixed without penalties.

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SS
Reiki Grand Master

Quote:

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Originally posted by sudesingh

If your VRM is a closed one then it will have penalties attached unless if it's a open VRM. Though with a closed VRM you should be able to convert to a fixed without penalties.

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America Ka Vyapaari Canada Ka Bhikari

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Go with Fix mortgage... The condition we are in right now Interest can only go UP.

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