Ages ago on this forum I saw a post indicating that this would be an awesome rate (3.49%, 5 year fixed). I can`t find the post anymore to see exactly how long ago that was, but in today`s world is this still considered awesome, or is it more the norm? With the BoC holding the prime rate steady for what could be a long time, I`m tormenting myself (again) on the wisdom of locking in at this fixed rate or continuing on with the variable rate. Any comments that would help guide my decision and put an end to the torment would be greatly appreciated!
Interest rate 3.49% on 5 year term
- Thread starter TomB
- Start date
I have seen 5 year fixed at 3.39%. However, I don`t know if there are strings attached.
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Peter Kinch is outstanding and all REIN members can attest the same.
James
www.pkteam.ca
Peter Kinch is outstanding and all REIN members can attest the same.
James
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- Aug 29, 2007
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The savings on variable historically outperform fixed.
The advantage to fixed is you know exactly how much the interest will cost for the term.
The advantage to variable is your total interest cost is less for the same period of time.
The advantage to fixed is you know exactly how much the interest will cost for the term.
The advantage to variable is your total interest cost is less for the same period of time.
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There are many special 5 year rates available today on purchases and refinances, but that does not necessarily mean you can lock you existing variable rate at these special rates. You should confirm with your current Lender the rate you can lock in at today Vs the discount you currently have to Prime on your variable (not disclosed in your post).
Also consider how long you plan to hold the property before refinancing or selling, the DCR of this property, the DCR of your portfolio, your future purchase plans, as well as your personal risk tolerance.
Also consider how long you plan to hold the property before refinancing or selling, the DCR of this property, the DCR of your portfolio, your future purchase plans, as well as your personal risk tolerance.
To clarify..... I`m interested in locking in on my principal residence where I expect to be for at least 5 more years. I own 2 other revenue properties with variable rate loc at prime and variable rate mortgage at prime - 0.6%. I`m a bit nervous about having everything in variable mortgages going forward, given everything BoC is saying for future increases. I know the rate will remain unchanged for several months now as per the most recent rate announcement on Tuesday and Carney`s comments about a long pause. But eventually they will go up again and it might be steep by 2012 when the economy gets moving again.
I agree with the general truth of saving with variable rate over fixed but I question if this will hold true over the next few years. I mean,,, the prime rate is unusually low - emergency rate, not normal rate and we know it has really only one way to go - up.
BTW, the 3.49% rate is with First National Financial withy pretty typical terms and very generous opportunities given to pay down the mortgage faster - eg. increase payments by 15%, double the mortgage payments, pay 15% annual lump sum payment, or all 3 with no penalty!
So,,, the question is to lock in now at this pretty good rate, or go another few months or more and adopt a wait and see approach to how long Carney plans to pause on rate hikes. Obviously, this strategy could result in losing the 3.49% rate, but in the meantime I`d save money paying on the lower variable rate over the fixed rate. If the 3.49% rate is gone and a 3.59 rate will still be around then not a big deal. I can handle that. But if the fixed rate goes way higher then it would be a bad idea to wait.
I guess I see a lot of predictions on where the prime rate is going or not going, but very few predictions about what fixed rates will likely do, which is why I am seeing what others think. Who knows,,,maybe someone has heard something about these fixed rates going even lower!
I agree with the general truth of saving with variable rate over fixed but I question if this will hold true over the next few years. I mean,,, the prime rate is unusually low - emergency rate, not normal rate and we know it has really only one way to go - up.
BTW, the 3.49% rate is with First National Financial withy pretty typical terms and very generous opportunities given to pay down the mortgage faster - eg. increase payments by 15%, double the mortgage payments, pay 15% annual lump sum payment, or all 3 with no penalty!
So,,, the question is to lock in now at this pretty good rate, or go another few months or more and adopt a wait and see approach to how long Carney plans to pause on rate hikes. Obviously, this strategy could result in losing the 3.49% rate, but in the meantime I`d save money paying on the lower variable rate over the fixed rate. If the 3.49% rate is gone and a 3.59 rate will still be around then not a big deal. I can handle that. But if the fixed rate goes way higher then it would be a bad idea to wait.
I guess I see a lot of predictions on where the prime rate is going or not going, but very few predictions about what fixed rates will likely do, which is why I am seeing what others think. Who knows,,,maybe someone has heard something about these fixed rates going even lower!
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"way higher" won`t happen in one step IMO. you can always lock in after the first increase which may be as low as a quarter point. i`m sure you know the impact a quarter point has on your current revenue properties, if not calculate it and see if that is something you can live with. calculate the savings per month that it remains where it is at and weight your options. just my .02. cheers.