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SHOULD I SIGN FOR A VARIABLE OR FIX MORTGAGES RATE
The question that all mortgage borrowers ask us most often:
Is it better to opt for a fixed- rate mortgage or variable rate mortgage? For several years, the classic answer was always: it depends on your cash flow and your tolerance for risk, but the variable rate mortgage or short term has been more advantageous in the long term. Example:
During the period 1950 to 2000, a Canadian borrower would have paid on average $ 22 000 in interest over costs on a mortgage of $ 100 000 amortized over 15 years, opting for fixed rate mortgages for five years instead of variable rate mortgages. The only advantage had been a greater peace of mind that payments are fixed and do not change for five years.

Those who felt that this peace of mind was too dearly paid for were right. This is not necessarily true today, some time ago, you could have negotiate a variable rate at Prime less 0.8%, it currently trades at Prime + 1%, or 3.5% at we are writing these lines, while that we can obtain a term of five years to 3.75%, the margin is very thin!
Data from the Canadian Association of Accredited ... more

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