Know your options for mortgage interest
With the Canadian resale housing market booming, and indications that the Bank of Canada may increase interest rates, there’s been a lot of attention lately regarding the various options available for mortgage loans. Whether you’re applying for a new mortgage, or thinking about refinancing before the predicted rate increases hit, it’s important that you know your options so you can make an informed decision.
When you choose a mortgage, you have to decide whether you want the interest rate to be fixed, variable or adjustable. There’s no one right choice. Each of these three options offers various advantages. Your task is to choose the one that’s right for your specific needs.
According to the Canada Mortgage and Housing Corporation (CMHC):
· A fixed rate mortgage is locked-in for the entire term of the mortgage.
· With a variable rate, the payments remain the same each month, but the interest rate fluctuates based on market conditions.
· For adjustable rate mortgages, both the interest rate and the mortgage payments vary based on market conditions.
When making your mortgage choice, be sure to evaluate the impact of an increasing interest rate on your monthly payment.
Want to know more about mortgage options and which one is right for you? Contact me to learn more. When you’re ready to finance, I can also help you connect with an experienced lender to assist you. Remember, this could be your best time to explore your options, before any anticipated rate increases kick in.
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