Should I lock in my variable mortgage rate?
- PostedFebruary 25, 2019
Now could be a VERY good time to refinance for you!
The Bank of Canada has recently raised rates a few times and experts are saying that they expect another 2 rate hikes by the end of the year. This affects you if you have a Variable Rate Mortgage or a Line of Credit (aka HELOC). You can thank the increasing strength of the global economy for that.
So the question is, “should I lock in my variable rate”?
Odds are, the answer is YES and as of today, 9 times out of 10, we can beat your current lender and save you a LOT of money.
Due to many variables, this is a difficult question to answer immediately, everyone’s own personal situation is unique. There is no one size fits all…
Well, there are 3 main considerations:
1. Your current variable interest rate,
2. Your future goals and housing/mortgage plans, and
3. Your potential new fixed rate (this is a big one).
If your variable rate has increased to 3% and over, you may want to think about locking in. Call me!
If your mortgage is insurable, and we can get you a rate of around 3.29% or lower, and your current variable is over 2.90%, you may want to have a conversation about locking into a new fixed rate with us. The key here is whether or not your new fixed rate is less than 0.5% difference in your variable rate.
Current insurable fixed rates are around 3.19%. Uninsurable rates are around 3.59%.
However, variable rates may be preferable over the fixed because the variable rate has the lowest prepayment penalties. Variable rate prepayment penalties are below 1% of the mortgage, where fixed rates at big banks can be 4%+ of the outstanding mortgage.
If you have a Line of Credit (aka HELOC) and are not using it to its potential, GET OUT OF IT. Call me for more details.
Call ASAP for more details and don’t miss this window of opportunity!