The Difference Between Fixed and Variable Rate Mortgages

Matt Robinson | Dominion Lending Centres

info@matthewrobinson.ca   –  604-852-1703

Are you in the market for an Chilliwack mortgage , or are looking for an Abbotsford mortgage broker , well look no further because Matthew Robinson is here to help you!

When deciding which home loan is your best option, it is important you evaluate your finances. Be aware and honest about your income, the specific lifestyle you lead, and your personality. Some mortgage rates are riskier than others so it is important you recognise whether or not you can handle the inconsistency and potential risks that are associated with those loans.

So what loan is right for you? There are two main types of loans: fixed rate mortgages and variable rate mortgages.

A fixed rate mortgage is a loan where the rates are consistent throughout the term of the loan. No risk is associated with this loan in terms of interest rates going up unexpectedly. Your monthly payments will not fluctuate, and instead stay consistent. This is a great option if you do not like to take risks. With this loan, you know exactly how long it will take you to pay off because the rate never changes. It allows you to accurately budget, however, higher interest rates are usually associated with fixed mortgages.

A variable rate mortgage is a loan where the interest rates are a lot lower than a fixed mortgage. This mortgage is associated with a lot more risk. Without a heads up, the interest rates could increase or decrease. This inconsistency can cause people a lot of stress, so it is important to understand if you can handle the risk or not. Assessing your financial situation and seeing if you can afford at least a 2% increase in your variable rate, is a good way to know if this option works for you.

Regardless of which loan you would like to go with, your local Abbotsford and Chilliwack mortgage broker can work with you and advise you on your best option. So don’t wait, contact Matt Robinson today at 604-852-1703 or info@matthewrobinson.ca.

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