Variable fixed or closed?
- Thread starter Bindy25
- Start date
- Joined
- Oct 16, 2007
- Messages
- 758
A Variable Open would have no penalty if you paid it out in the middle of the term. The rate on the VRM Open is usually prime + XX%. Right now, a couple of lenders offer .8%, with a regional lender here in BC at P + .5%.
The VRM Closed, is closed for the full term of the mortgage. A 3 month interest penalty would apply if you paid it out early.
The VRM Closed, is closed for the full term of the mortgage. A 3 month interest penalty would apply if you paid it out early.
- Joined
- Jan 29, 2008
- Messages
- 1,025
Unless you are planning to sell right away, go with the variable closed. It doesn't take too long before the lower interest rate pays for the penalty even if you were to break it. I just ran the numbers on a mortgage I got recently, and I saved the difference between open and closed in about 4-5 months, so keeping the property longer than that means closed comes out ahead.
Regards,
Michael
Regards,
Michael