Sarah A. Colucci, York Region's Mortgage Expert. Savings Guaranteed.
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Deciding between a fixed and variable rate mortgage.

You may find it difficult to decide between a variable-rate mortgage and a fixed-rate mortgage. When choosing which option is right for you, consider these factors:

If the overnight lending rate changes, your variable interest rate may fluctuate during the term of your mortgage. Variable-rate mortgages are based on the overnight lending rate that is determined by the Bank of Canada. 

Benefits of a variable rate mortgage: 
  1. They have historically been cheaper over the last twenty-five years compared to the five-year fixed rates.
  2. There is more flexibility when breaking your mortgage because the penalty is just three months' worth of interest.
  3. If the rate drops during your mortgage term, you will save more money. 

Disadvantages of a variable rate mortgage:
  1. Fluctuating payments; interest rate could rise.
  2. Some variable rate mortgage products are not portable, meaning you cannot move your mortgage to a new property if you sell.
  3. A blend and extend option is usually not available with variable rate mortgage products.

Consider a fixed-rate mortgage if you are not willing to take any risk and do not want to worry about paying a higher interest rate on your mortgage. 

Benefits of a fixed-rate mortgage: 
  1. If you want to refinance without paying a penalty, you can port your mortgage to a new property, and blend your rate.
  2. With no unexpected costs or surprise increases to your mortgage payment, you can budget.

Disadvantages of a fixed-rate mortgage:​
  1. More interest can be paid over the term since, if interest rates go up, you are locked into the fixed-rate you chose for the term of the mortgage.
  2. Higher prepayment penalties if you decide to exit early. 

If you need help determining the right option, we can assist you. Call us at 647-773-4849 today. 


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Address

411 Queen St. 
Newmarket, ON
​L3Y 2G9

Sarah A. Colucci, Mortgage Agent Lic. M14000929
Sherwood Mortgage Group
Licence # 12176

Telephone

Direct: 647-773-4849
​
Email: scolucci@sherwoodmortgagegroup.com
Picture
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?