Personal Finance

Variable or Fixed..plus any other suggestions...

  • Last Updated:
  • Nov 20th, 2011 9:22 pm
Tags:
None
Newbie
Oct 1, 2008
72 posts
1 upvote
Surrey

Variable or Fixed..plus any other suggestions...

I`m in a dilemma or well the family is so I want to get some advice or maybe your experience in a similar situation, here`s the situation..

We`ve looked into a house that we want to buy which we`ve made a deal with the seller for $760K.

My parents own the current house which is valued at about $450K, have a mortgage left for $70K, have a HELOC available at $300K at Prime (3%).

My mum has an apartment which she owns valued at $245K, mortgage of $195K, rented for $1175/month and she makes about $120K a year.

Now based on the above I`m pretty confident she can get a mortgage for about $460K no problem ($300K will be picked up from the HELOC from the current house which we will be turning into a rental property). I know there will obviously be other expenses involved in the purchase and the move and there is enough saved for that (approximate cash available $40K)

So now to the point:
We are getting offered Variable at P-.5 = 2.50% for 5 years from a credit union
OR
Fixed at 2.5% for 2 years, or 2.75% for 1 year from TD (through a friend of mine)

I`m currently leaning towards the fixed for 1 or 2 years and hope we can get a better discount off the Prime by then so we can convert towards variable because our family is a big believer in variable mortgages as currently the other 2 properties are at P-.80 and P-.90

I just want to know if you were in our situation which option would you go with and why? any other suggestions about how to go about this situation would be appreciated
Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)