“The key take-away is that variable-rate mortgages have a guaranteed prepayment penalty of only three months’ interest, compared to the potentially much higher fixed-rate penalties using a complicated interest rate differential calculation.”, Roy Cocciollo.
You might see news articles warning that “prime rate almost always climbs after a recession”, however, another point in favour of choosing a variable-rate mortgage is that interest rates cannot increase randomly. There are eight pre-scheduled Bank of Canada meetings every year to decide whether to move the Prime lending rate or not. The interest rate will not double overnight. In fact, the interest rate is unlikely to move by more than .25% following any given meeting. So…the fear of rate hikes should not drive your decision to lock into a Fixed Rate.
YourMortgageYourWay.ca will help you save thousands on your mortgage by matching you with the right mortgage lender for your needs. Our promise is to use simple language, full transparency, and clear communication every step of the way.
Are you thinking about getting a lower interest rate and worried because you’re in a fixed-rate mortgage? Don’t be afraid of your penalty, we have a solution.
Give us a call now and let’s do a mortgage review. Cashback mortgages can help you get up to 3% of your mortgage balance back to you. You can use this cash to cover expenses like your legal fees, moving costs, investments, or even pay back your mortgage with a lump sum. Or better yet, pay your penalty and get a lower rate on your mortgage.