Variable Mortgages

Fixed-Rate VS. Variable Rate Mortgages 

 

 

                                  

 

When it comes to mortgages, there are two options to choose from; While fixed or variable may seem easy, there are a few things to keep in mind when deciding which mortgage option is best for you.

 

Fixed-Rate

The name says it all too; You will pay a certain amount each month for the number of years agreed upon until the full amount of the loan you have paid is paid. This monthly payment is calculated by your bank which will give you the annual percentage rate as well as the position quote. Once those details are finalized and agreed upon, you will pay that amount each month during the mortgage. 

 

If, for example, you agree to a mortgage course of up to 25 years, by the end of that period, you will have to repay the principal amount you borrowed, along with interest on the bank and any other expenses added to the total. This amount will be added together and divided into equal monthly payments, thus creating a fixed rate that you are paying monthly.

 

If you value the idea of ​​consistency and are uncomfortable with uncertainty, a fixed mortgage rate would be a better option for you as it will provide you with a comfortable financial plan that will not change month-on-month.


 

Variable Rate

Variable means the probability of change. This option is not as easy as the fixed-rate because interest rates change regularly depending on the main or overnight rate changes, the government’s set rate that determines whether the interest rate rises or falls. Many people say that the variable option is risky because there is no guarantee, while others argue that it saves you money in the long run.

 

Variable-rate mortgages can be done in two ways, one involving a fixed payment plan and the other, which allows for variable payments. If you decide to go with the fluctuation option, your monthly payments can be very different each month which you should keep in mind.

 

 If you decide to go with a fixed payment plan, the amount of payment to the principal, as opposed to the interest you pay, will depend on what the interest rate is on that month.

 

If you feel comfortable with the change and don't need an accurate monthly financial plan, a variable rate option may be for you.

 

No matter which mortgage plan you lean towards, CYR funding can help. As one of Ontario's best mortgage brokers, they can bridge the gap between fixed rates and variable rates and help you decide which mortgage is best for you. They specialize in commercial mortgages as well as mortgage refinancing. If you are looking for a broker you can trust, call today!