FIXED VS VARIABLE RATES

In an enlightening session with mortgage expert Renee Huse, we explore the nuanced debate between variable and fixed-rate mortgages. Renee offers insightful perspectives that shed light on why choosing a fixed rate might be more advantageous for many homeowners. Discover more in-depth analysis in our comprehensive blog where Renee discusses the potential of specific listings as investment opportunities.  

The dilemma between choosing a variable or fixed rate mortgage is a common query among our clients. Renee Huse, with her vast experience, suggests that the ideal choice fluctuates with market conditions. She shares her strategies for navigating today's mortgage landscape, highlighting the minimal difference between variable and fixed rates.

Variable rate mortgages are closely tied to the Bank of Canada's overnight lending rate, while fixed-rate mortgages are more influenced by the long-term bond market. Given the current economic strategies aimed at maintaining low borrowing costs for Canadians, both fixed and variable rates are exceptionally low. In this context, Renee argues that the stability offered by fixed rates, especially when they are at historic lows, far outweighs the flexibility of variable rates.

Decoding Variable vs Fixed Calgary Mortgages

Renee often addresses concerns about rising rates, suggesting that there's little room for them to decrease further. She posits that as the economy gradually recovers, spurred by increased consumer confidence and the resurgence of small businesses, interest rates are likely to inch upwards. This makes locking in a fixed rate an attractive option for securing affordable financing for real estate investments.

However, fixed rates come with their own set of considerations, notably higher penalties for early payout, known as the interest rate differential penalty. In contrast, variable rate mortgages typically incur a penalty equivalent to three months of interest. For those anticipating a move or sale within five years, a variable rate mortgage might be the better choice.

Our mortgage specialists are ready to provide a customized consultation tailored to your unique needs, ensuring you make the most informed decision regarding your mortgage.