So, you’re in the process of shopping for that optimal mortgage rate? With the recent trend of falling interest rates, you are likely very tempted to go for a fixed rate mortgage which appears to be extremely popular at the moment- but is this the best option for you and will you be making the best decision if you ultimately decide to lock into a fixed rate mortgage?
According to Bank of Canada Governor, Mark Carney, interest rates have bottomed out and it will be only a matter of time until he raises them again. Therefore, if you are seriously considering a fixed rate mortgage, the time to act is now!
While fixed interest rates are normally higher than variable interest rates, they are currently at never before seen lows i.e., between 3 and 4%. With most mortgage contracts lasting anything between 5 to 10 years and interest rates sure to rise, if you believe that you won’t end your mortgage term early, it would probably be best to consider a fixed rate mortgage.
If you were wondering if you can switch from a variable rate mortgage to a fixed rate mortgage, the answer is “yes”. Usually, the switch is free but some lenders may charge a processing fee.
When considering a fixed rate mortgage, the key is to shop around because interest rates vary from lender to lender and it is well worth the effort and time as you will save money in the long run.
Everyone’s situation is unique but with today’s low interest rates, a fixed rate mortgage is certainly a sensible option and one you would definitely not regret.