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Who Should Choose a Fixed vs Variable Mortgage?

couple shaking hands with a mortgage professional - fixed vs variable mortgage ratesInterest rates in Canada have been at all-time lows for a long time. They have nowhere to go but up, and some indicators, such as rising inflation, could signal interest rates hikes on the horizon. People considering buying a home or approaching renewal time for a mortgage may be wondering whether it is better to choose a fixed rate mortgage or variable rate.

The answer is not necessarily obvious. Many factors could affect your decision between fixed vs variable mortgages. For example, first-time homebuyers stretching their budget to purchase a new home may want some insulation from increased mortgage payments. However, seasoned homeowners looking to speed the repayment of their mortgage may be less sensitive to fluctuations. Whatever your situation, consult a mortgage broker for help and advice on fixed vs variable rate mortgage rates.

Steps to Getting Your First Mortgage

First-time homebuyers are often surprised by all there is to know about mortgages and how they work. How to get a mortgage is not taught as part of financial literacy education, though one could argue that it should be. Until then, mortgage brokers can be a great source of information about how to get a mortgage.

Prepare by taking a close look at your finances and spending. Create a budget that considers all of your expenses and repays any outstanding debts like student or vehicle loans. Think about how much you can afford for a downpayment and where that money will come from. Gather the information that a mortgage lender would need to see, including proof of your income. This is often enough to get a mortgage pre-approval from a lender.

Contact a mortgage broker to discuss the options of fixed or variable rate mortgages and to start a mortgage application. Your mortgage broker will shop around for the lowest interest rate offer among multiple mortgage lenders. Once you have pre-approval, you’ll generally know how much you can qualify to borrow and can start shopping for a home in the proper price range.

Ask a Mortgage Broker in Burlington

Home prices have been rising steadily in Burlington. It’s getting more difficult for new buyers to get into the market. However, you can find a mortgage broker in Burlington who can help you get the lowest rates. Mortgage brokers work for you, not for the lending company, so they are more motivated by helping you get a better deal than by promoting certain lending products.

That’s not always the case when seeking a mortgage from a bank. Bank mortgage specialists have only a narrow range of products they can offer. That limits your choice and doesn’t guarantee that you get the lowest possible Burlington mortgage rates. Paying even a quarter of a percent more in interest, especially early on in your mortgage amortization, can mean a difference of thousands of dollars over the life of the mortgage. Let a mortgage broker help avoid the added cost!

Why Would You Need a 2nd Mortgage?

A 2nd mortgage is just what it sounds like, an additional mortgage loan on top of your existing mortgage. People may take out 2nd mortgages to pay for a major renovation, a life event like a wedding or education, or consolidate other debts. The interest rate is generally higher than a first mortgage. However, interest rates are often lower than a line of credit or another loan making it an attractive option. Get help from a mortgage broker who can connect you with lenders who allow second mortgages and offer competitive interest rates.

Private Lending for Investment Property Mortgage Rates

Real estate investments are an excellent alternative to stocks or other securities-based investments. Depending on your choice, you can invest to quickly make improvements and flip the home or rent it out for a steady income stream that helps pay for itself.

Harrison White is a mortgage broker in Burlington who can help with all of your mortgage needs, whether you are buying for the first time, renewing a mortgage, looking for a bridge loan, a second mortgage, or an investment mortgage. Call Harrison at (905) 541-6961 or submit the form below and experience the HW Advantage today!

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