Wondering if it’s time to switch your mortgage rate from variable to fixed? Here are some things to consider.
Is a Fixed-Rate Mortgage Right for You?
As a homeowner in Canada, you may be considering whether or not to switch from a variable rate mortgage to a fixed-rate mortgage.
Fixed-rate mortgages offer you payment stability as the interest rate remains constant for the duration of the term, whereas variable rate mortgages fluctuate along with changing interest rates, which could result in an unexpected jump in how much you owe each month. This blog post will explore both the pros and cons of taking on a fixed-rate mortgage so that you can make an informed decision that is best for your financial situation and personal needs.
Advantages of Fixed-Rate Mortgages
One of the major advantages of opting for a fixed-rate mortgage is that it provides you with predictability. Your payments will remain consistent throughout the term because they are not subject to fluctuating market conditions. This means that even if interest rates increase over time, you won’t have to worry about paying more than what was initially agreed upon when you signed your contract.
Disadvantages of Fixed-Rate Mortgages
If you stay with your current lender instead of letting a knowledgeable mortgage broker help to find you a better rate, you will be locked into your lenders current posted rate for the remainder of your term. So, shopping around for a better rate would be beneficial to you. At Mortgage Tree, we specialize in helping homeowners get the best market rate possible. Contact us here -> https://mortgagetree.ca/contact-mortgage-tree/
Although there are many benefits associated with fixed-rate mortgages, there are also some drawbacks. The main disadvantage is that if interest rates decrease significantly during the course of your mortgage term, then you won’t benefit from those savings as you would if you had chosen a variable rate mortgage instead.
Conclusion:
When deciding whether or not to switch from a variable rate mortgage to a fixed-rate mortgage, it is important to weigh both the advantages and disadvantages associated with each option before making a final decision.
If predictability and stability are important factors for you when managing debt, then opting for a fixed-rate mortgage may be the right choice for your financial situation and personal needs. It is always important to speak with an experienced mortgage broker like Mortgage Tree who can provide insight into which type of mortgage may work best for you given your individual circumstances and goals.
Don’t make this decision lightly, look at all the available options first, by taking the time to shop around you could help save your family and yourself a lot of money.
Click to try out our FREE mortgage calculator -> https://mortgagetree.ca/mortgage-tools/mortgage-calculators/mortgage-calculator/
Let’s get you on the right track.
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We hope we have been able to answer a few questions.
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Sincerely,
The Mortgage Tree Team – “Your Key to Home Ownership”
https://mortgagetree.ca/contact-mortgage-tree/mortgage-team/