My Mortgage renewal is coming in September


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Panasonic   
Member since: May 10
Posts: 160
Location: :

Post ID: #PID Posted on: 29-03-21 00:46:29

Hello guys,
I was first time home buyer I bought house 5 years ago now I had fixed mortgage term which is ending in September. I am hearing mortgage rate is about to increase. I am with CIBC currently.

Should I buy right now or wait ?

Kindly also let me know is it good to take variable rate or fixed rate. My bank offering me fixed for renewal rate 2.09% and variable 1.63%. I am really confused. Other thing I want to ask do I need to resubmit all my job letter or income if i go to same bank.

Your advise will be much appreciated also what are cons and pros between both mortgages.

Thanks,



Garvo Gujarati   
Member since: Nov 01
Posts: 3104
Location: :

Post ID: #PID Posted on: 29-03-21 11:10:18

Quote:
Originally posted by Panasonic

Hello guys,
I was first time home buyer I bought house 5 years ago now I had fixed mortgage term which is ending in September. I am hearing mortgage rate is about to increase. I am with CIBC currently.

Should I buy right now or wait ?

Kindly also let me know is it good to take variable rate or fixed rate. My bank offering me fixed for renewal rate 2.09% and variable 1.63%. I am really confused. Other thing I want to ask do I need to resubmit all my job letter or income if i go to same bank.

Your advise will be much appreciated also what are cons and pros between both mortgages.

Thanks,



It is quite subjective, but in general you should wait for the term to expire. There might be early termination clause. I would personally go for variable rate, if I have a stable job. The reason being, it does fluctuate with economy. It means if the economy is bad, the rate would be lower, and it also means if I loose my job, my installments will also be smaller. The other way around is also true, with better economy even if the rates goes higher, I will also have a better job and better pay scale. In the fixed one they try to protect themselves with some margin and that would come on the way and so it will be higher.

Having said that the difference of half percent a year mean, on a total amount of 100,000 $ the extra interest you would be paying is $500 a year or $2500 for 500,000 $. If that's significant, I would go for variable one, otherwise I would not bother.


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A Proud Indian Canadian


Panasonic   
Member since: May 10
Posts: 160
Location: :

Post ID: #PID Posted on: 29-03-21 16:03:39

Quote:
Originally posted by Garvo Gujarati

Quote:
Originally posted by Panasonic

Hello guys,
I was first time home buyer I bought house 5 years ago now I had fixed mortgage term which is ending in September. I am hearing mortgage rate is about to increase. I am with CIBC currently.

Should I buy right now or wait ?

Kindly also let me know is it good to take variable rate or fixed rate. My bank offering me fixed for renewal rate 2.09% and variable 1.63%. I am really confused. Other thing I want to ask do I need to resubmit all my job letter or income if i go to same bank.

Your advise will be much appreciated also what are cons and pros between both mortgages.

Thanks,



It is quite subjective, but in general you should wait for the term to expire. There might be early termination clause. I would personally go for variable rate, if I have a stable job. The reason being, it does fluctuate with economy. It means if the economy is bad, the rate would be lower, and it also means if I loose my job, my installments will also be smaller. The other way around is also true, with better economy even if the rates goes higher, I will also have a better job and better pay scale. In the fixed one they try to protect themselves with some margin and that would come on the way and so it will be higher.

Having said that the difference of half percent a year mean, on a total amount of 100,000 $ the extra interest you would be paying is $500 a year or $2500 for 500,000 $. If that's significant, I would go for variable one, otherwise I would not bother.



Thank you for reply. No they said if you take right now there is no penalty you will get new rate but problem is that they giving me higher price.



Garvo Gujarati   
Member since: Nov 01
Posts: 3104
Location: :

Post ID: #PID Posted on: 30-03-21 09:57:01

I would wait and meanwhile shop around with other banks. Once you have one offer on hand, it helps to negotiate with others. :)


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A Proud Indian Canadian


sudesingh   
Member since: Jul 04
Posts: 2085
Location: :

Post ID: #PID Posted on: 03-04-21 11:06:43

I renewed with CIBC last month and got a rate of 1.43% for a 5 year VRM. Try and negotiate with them. Also check with Tangerine, they have good rates too. At this point I suggest keep it VRM unless if they give you something under 2% for a fixed rate.


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SS
Reiki Grand Master


Panasonic   
Member since: May 10
Posts: 160
Location: :

Post ID: #PID Posted on: 08-04-21 22:23:29

Today, my bank offered me 1.4 VRM 5 years and 1.80 for fixed 4 years. Kindly give your sincere advise.



sudesingh   
Member since: Jul 04
Posts: 2085
Location: :

Post ID: #PID Posted on: 09-04-21 09:20:23

My preference would be VRM, but considering they're also offering 1.8% for a fixed, that's a good deal too. Almost guaranteed, the VRM will cross 1.8% within 4 years.

Hmmm...tough choice. I'm now leaning towards the fixed.


-----------------------------------------------------------------
SS
Reiki Grand Master


Raaj23   
Member since: Mar 18
Posts: 1
Location: :

Post ID: #PID Posted on: 11-04-21 10:58:45

Better go with 1.80 for fixed 4 years. Rate is less than 2 percent. Its peace of mind for 4 years.





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