Variable or Fixed rate Now?

angelapeng

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Aug 19, 2011
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#1
I have a mortgage up for renewal on Dec. 1, it is with TD. It offers 5 year variable at 2.97% (prime-0.88), or fixed 5 years at 3.87. I always take variable over the last 14 years except those promotional 1 or 2 year fixed rate. However, considering the current interest rate environment, I wonder whether I shall lock in the 5 year rate. TD's 10 year fixed rate is 4.37%, not I want to lock in that long period of time, but just by analyzing its offering, it seems like the bank does not think it will go crazy high over the 5-10 years period.

What is your thought?
 

angelapeng

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Aug 19, 2011
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#3
Take a two year fixed rate every two years.

Prime will be 0.75% to 1% higher by 2020. Variable prime minus 1.25-1.4% by then.

Five year mortgages the most popular so they are always padded.

I now do two year fixed mortgages every two years on my houses or condos.
The two years fixed rate is not any better than 5 year fixed at 3.67%, the five year one is 3.87% though.
 

DEWDROPS

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Jan 7, 2010
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#4
I have a mortgage up for renewal on Dec. 1, it is with TD. It offers 5 year variable at 2.97% (prime-0.88), or fixed 5 years at 3.87. I always take variable over the last 14 years except those promotional 1 or 2 year fixed rate. However, considering the current interest rate environment, I wonder whether I shall lock in the 5 year rate. TD's 10 year fixed rate is 4.37%, not I want to lock in that long period of time, but just by analyzing its offering, it seems like the bank does not think it will go crazy high over the 5-10 years period.

What is your thought?
Going rate for 5 yr variable closed is 2.3 to 2.4%, why would you sign up with TD for 2.97%? Shop around.
 
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JROC

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May 27, 2008
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#5
Going rate for 5 yr variable closed is 2.3 to 2.4%, why would you sign up with TD for 2.97%? Shop around.
It depends what the property is used for. Is it a rental or owner occupied. Is it high ration insured or conventional?

Rates are different with many categories now.
 

Martin1968

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Jan 22, 2017
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#9
Next year? I just (closed few weeks ago) did 3 @ P-.9% so I’d say we’re already there


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Just curious, was this on a rental prop? What type of rental?
And also with which financial institution and was it a 5 yr variable closed?
Pretty good though.
 
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Matt Crowley

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Dec 14, 2013
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#10
I was offered P - 1% and P - 75 bps but I'm taking a look at fixed as well. I think there are only 2 rate hike discounts included in the variable rate for me right now.

We are at 1.75% right now in Canada and the U.S. is at 2.25%. The FOMC dot plot looks like the U.S. is heading to 3% in 2019 and I suspect Canada will follow. Rental growth in Alberta has been more or less nonexistent. I'd be more optimistic about Alberta's S-T fortunes if the east was at lows for consumer confidence but that isn't the case.

I'm wavering between variable and fixed right now. I think Canada's upper end in around 3% in the short to 3/4 year term as household debts are high as is government debt and the servicing ratio is the key concern.
 

kfort

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Sep 1, 2010
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#11
Next year? I just (closed few weeks ago) did 3 @ P-.9% so I’d say we’re already there


Sent from my iPhone using myREINspace
Just curious, was this on a rental prop? What type of rental?
And also with which financial institution and was it a 5 yr variable closed?
Pretty good though.
3 rentals. TD. 3 year variable closed


Sent from my iPhone using myREINspace
 

Willyboy

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Aug 19, 2016
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#12
What I suggest is take a two or three year fixed rate now although there's not a significant difference with the 5 year one but better than nothing. Then start and keep taking variable until you pay off your mortgage.
 
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angelapeng

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Aug 19, 2011
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Vancouver
#13
I recently completed one renewal, and one refinance. The renewal one is with TD at Prime-1.05% for 5 year closed, the refinance one is with CIBC at Prime-0.6% 3 years closed, I could convert to fixed at 4 years at 3.64% or 5 years at 3.74%. The refinance one is a unique experience, they only refinance at 47% LTV, and I only get extra 22K out of the existing equity. However, I still proceed with the refinance because I have HELOC set up with the mortgage, giving me flexibility in the future to withdraw the funds.