Mortgage rates can be fixed or variable. Depending on your goals and objectives, either type of loan can work well for you. However, there are definitely benefits to a variable rate mortgage for some borrowers and we are happy to offer flexible mortgage rates as part of our mortgage services.
With a variable rate mortgage your interest rate will fluctuate throughout the term of your mortgage. Your rate will be built on a prime rate based on the current Bank of Canada prime rate. The prime rate is also known as the prime lending rate. The rate is set annually and used by Canadian banks and financial institutions to set interest rates for variable rate lending.
A variable rate may fluctuate, but your payment will remain consistent. Essentially, the amount of principal you pay down is impacted as a result, but your month-to-month financing costs do not fluctuate.
The potential for shifts in rates means that when interest rates are low, a larger percentage of your monthly payment is applied to the principal you owe. Conversely, when rates are high a greater percentage of your payments will go towards interest and you will pay less towards your principal balance.
The financing decision is ultimately yours, however, the length of your mortgage should be your first consideration before you decide to go with a fixed rate or a variable rate and make your mortgage application. A variable rate mortgage may result in paying less interest than a fixed rate over time.
Historical trends show that mortgage rates often vary enough to make it worth it to a long-term borrower to navigate the ups and downs of rate changes over time. Essentially, the amortization period of your loan should be a big factor in your decision-making process. If you plan to take a longer mortgage term you are likely to see a greater impact in changing interest rates on your mortgage payments.
For borrowers who are interested in selling their home in a few years or refinancing in the short term, a variable rate mortgage could be less beneficial and a fixed rate mortgage might make more sense.
You can count on us to help get your variable rate loan approved and you can count on our lenders to get you the most flexible terms you qualify for. The fact is that variable rate mortgages generally offer more flexible terms and can often yield lower interest rates than their fixed counterparts.
Lower rates are never 100% guaranteed, but historically over the past few decades borrowers have experienced lower rates under this financing structure. Lower rates can mean paying down your principal balance much faster – and building up your equity much quicker.
It can be more difficult to qualify for a variable rate mortgage. Lenders often use a higher rate to qualify borrowers for this type of financing. The financing rate used is called the benchmark rate and it is also set by the Bank of Canada. Essentially, the benchmark rate is used to ensure affordability. If you cannot handle the benchmark rate, you may not be able to handle a rate increase under the variable structure.
While a variable rate mortgage may be more difficult to qualify for, it may also come with few to no significant penalties if you change your mind later. Banks do not typically charge penalties for converting from a variable rate mortgage to a fixed rate. Your risk is minimal if you qualify today but worry that a change in income or life circumstances could make it difficult for you to afford a variable rate increase tomorrow.
Even if you’ve applied with other lenders and been declined for a variable rate mortgage, we can help. Our specialty is assisting borrowers who have faced challenges due to income or credit history. We have an advantage over other lenders because our many lending partners are willing to work with unique and challenging situations that a bank may not.
Our many years of experience means that we know exactly who to approach on your behalf to suit your specific lending needs. The strength of our network is your advantage as a borrower. Our common-sense approach to lending will help you obtain the best rate with the most flexible terms.
Our lenders offer flexible lending requirements that can work with your income and credit history. To explore our complete list of mortgage services, please click on the service that you’re interested in on our sidebar menu.
We provide mortgage services to Canadians and we make sure they come first. With access to over 50 lenders we do everything possible to make sure you get the best rate coupled with the most flexible terms.
If you’re considering a variable rate mortgage or are interested in learning more about your options, it’s time to call the brokerage that has been serving Canadians for over 30 years.
We recommend booking a free consultation with our team to review your mortgage application. Allow us to complete a free review of your finances and discover the right mortgage rate structure for you, contact us today.
|Term||Posted Rate||Our Rate||Claim This Rate|
|Home Equity Line of Credit||Prime +1%||Prime +.50%||Claim Rate|
|Fixed 1 Year||4.50%||3.09%||Claim Rate|
|Fixed 2 Year||4.65%||3.39%||Claim Rate|
|Fixed 3 Year||4.65%||3.79%||Claim Rate|
|Fixed 4 Year||4.65%||3.99%||Claim Rate|
|Fixed 5 Year||4.89%||4.14%||Claim Rate|
|Variable 5 Year||5.80%||3.2% (prime -.95%) Net Rate 2.25%||Claim Rate|
|Fixed 10 Year||5.90%||4.54%||Claim Rate|