Well it’s time to address this age-old issue of Fixed or Variable. Right now Banks are pushing borrowers towards Fixed Rates by reducing the discount on their Variable Rate Mortgage products.
It seems the main problem is profitability. There is no real reason why discounts should have been reduced based on the current situation. In fact the Bond Yields have been going down for a month and just now the National Banks have begun reducing their fixed rates.
Let’s take a look at the whole picture for just a moment. The Bank of Canada is keeping an eye on inflation and they aren’t going to increase rates until it begins to rise above their benchmark. The U.S. is still in a terrible economic crisis due to lack of jobs and out of control debts. The European markets are in dire straits and the Canadian economy is still not recovered to the pre-recession levels.
I don’t expect to see any major upward shifts in Canadian interest rates for a very long time.
My advice is that if you are thinking of a Variable Mortgage because it’s right for your personal situation, do it now, don’t delay! If you want stability think about the Fixed Rate because it’s still unbelievable low. You can win either way, just make sure that your choice is in line with your own financial goals.
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Elfie Hayes as seen on the CTV National News, Rogers TV, published in RENO & Décor Magazine and profiled in Canadian Mortgage Professional Magazine.
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