In almost every domain, the more risk we take, the better the reward. Insofar as your mortgage is concerned, if you choose a variable rate you will have a lower initial rate. The rates could move even lower just as they could fluctuate upwards over the next 5 years.
Therefore, the questions you really need to ask yourself are:
- Could you live comfortably with the possibility that your rate, and, therefore your monthly payment, could increase?
- If the rates do increase, are you financially capable of absorbing the increased payments?
- Are you ready to pay more interest initially (if you choose a fixed rate instead), in exchange for the assurance of knowing that your rate will never increase during your term (usually 5 years)?
What if you mitigated your risk by going half and half? Yes, certain financial institutions offer mortgages that are in part fixed and in part variable.
Finally, the variable rate is a good option, but not one for everyone. So, do not hesitate to contact us in order to evaluate your personal mortgage needs. Our services are completely free and we will help you make the right decision.
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