Yeah I guess if the difference between fixed and variable is so minute then fixed would be preferable.The Destroyer wrote: ↑ I just purchased a home and was tempted to go variable but I am just banking on the fact that rates can't go much lower then they are now. Chose fixed to have peace of mind over the first 5 years and the consistent payments. In my case it was 20bps to 15bps difference so I decided to play it safe.
Zero advantages?
This, I went fixed (the spread wasnt that large anyway) because I see much smaller upside and a LOT greater downside to variable rates in this environment. However, this is only because I bought a forever house and don't anticipate moving in the next 5 years, come hell or highwater. If there was a chance I was going to break, I would probably go variable OR a fixed rate with a fair penalty lender.ADRiiAN` wrote: ↑ Zero advantages?
Fixed is pretty much at all time lows. The variable spread can’t be that much of a difference right now. In this climate, I’d take the 5 year fixed for security.
BoC is not suppose to raise rates until 2023 but that could also change quickly as the economic has bounced back quicker than they anticipated. If you go variable today, you’re taking the risk that rates won’t rise more than the fixed rate of today due to the narrow spread.
I took variable in 2018, when the spread was wide enough, I benefited greatly with the rapid interest rate drops. If I had to make the same decision today, I’d lock in with fixed
Care to elaborate on this?hierophant wrote: ↑ Surprising how many people think only variable is cheaper to break...many don't do their research.
Agreed. I have a 5 year fixed with a current penalty of $2580. I’m only 4 months in to the term.hierophant wrote: ↑ You can get a 5 year fixed with a 3-month break penalty (vs IRD)...I have one.
Are you sure it isn't the higher of 3 months interest or IRD?hierophant wrote: ↑ You can get a 5 year fixed with a 3-month break penalty (vs IRD)...I have one.
Yes I'm sure because I made sure I got a mortgage that I could break with a 3 month penalty - I did a lot of research beforehand so I knew what I was getting myself into. You have to ask - otherwise of course they'll give you the one that gives them more $$ should you have to break it.ozzie16 wrote: ↑ Are you sure it isn't the higher of 3 months interest or IRD?
If you just recently got the mortgage and the comparison rate is the current 5 year rate, with a fair penalty lender then I see how it's currently 3 months interest. But say, in 7 months when your comparison rate will be the 4 year term which normally carries, and let's say rates continue to fall, you would likely be looking at paying the IRD. It will sting a lot less than a big bank though with their insidious "discount" on posted rate calculations.
There's no free lunch with a fixed rate.
What lenders are you guys with that offer fixed with a 3 month penalty?hierophant wrote: ↑ Yes I'm sure because I made sure I got a mortgage that I could break with a 3 month penalty - I did a lot of research beforehand so I knew what I was getting myself into. You have to ask - otherwise of course they'll give you the one that gives them more $$ should you have to break it.
I can see rates staying low until the economy is booming. Then slow rise. Tiny ones.
