Bank of Canada Rate Increase 7/11/2018

As a result of yesterdays 0.25% increase in prime rate, the lenders have increased there prime rate from 3.45% to 3.70%. As available variable rates are between 0.5% and 1% below prime, a variable rate mortgage would be between 2.7% and 3.2%.  This is still below 5 year fixed rate levels.

When considering variable versus mortgage options, I like to make the analogy of purchasing insurance versus investing the cost of the insurance. In most cases the individual is better to invest than purchase insurance.  (ie. better to be variable than fixed)

However, should something unforeseen happen, the presence of insurance would be preferred.

In other words, a person's risk nature is the number one factor in determining fixed versus variable.

Please contact us if you would like a complimentary personal review of your current mortgage!

- John Parker, President

To Fix or Not to Fix?

Fixed or variable rate, which is best for you?

Probably the most common question that we address from our clients is whether to go with a fixed or variable rate on their next mortgage.  Studies show that variable rates out perform fixed in the majority of cases (estimated at 85% of the time).  Over the last two years, this expected savings probability has reduced due to the historic low fixed rates offered.

The recent rise in fixed term interest rates over the last six months has increased the expectation of variable out performing fixed over the next five years. 

Please contact us if you would like a complimentary personal review of your current mortgage!