It’s easy to be blinded by myriad mortgage terms – and find yourself utterly confused when deciding which product has your name on it.
In actual fact, however, in simplistic terms it all boils down to knowing yourself. Be really truthful (this is about you and you alone) when you are thinking about what suits you and your lifestyle. Then ask the question: are you a risk taker who easily copes with possible change each month, or do you want to know precisely what will happen?
As mortgage specialist Jason Chiang of TD Canada Trust explains in a our new free book called Show and Tell: New Home Buying Secrets (register here for your free copy), this is the starting point in working out whether a fixed or a variable rate mortgage works for you. “Mortgages,” Chiang emphasizes, “are really dependent on each individual situation.”
A fixed rate is for a set period – three or five years, perhaps – and affords the security of knowing what your payments will be – no matter how the bank rate fluctuates. “With a fixed term product you never have to worry during that term about interest rates moving, so your payments are set,” he says.
A variable rate brings more risk: your usually lower payments will be affected by any change in overall interest rates. Bank rates are based on the Federal interest rate and look out for press reports of expected shifts: is there an expectation that the rate may change significantly over the next year or two? If it does go up, will you still be able to make your payments?
Just remember, whichever you decide, it’s all about you.
Tags: BC Mortgages, BC Real Estate, Canada Mortgages, Canadian mortgage trends, first home, first time homeowner, Intracorp, Intracorp Canada, Intracorp Vancouver, New Homes Vancouver, New Real Estate, New Real Estate Vancouver, Pre Construction Real Estate, real estate, Real Estate for Sale Vancouver, Real Estate Vancouver, Show & Tell: Unlocking the Secrets of New Home Buying, Show and Tell, Vancouver developers, vancouver new homes, Vancouver Real Estate, Vancouver Realtors
