Variable Mortgage Interest Rate

Variable mortgage rates have for the most part remained low for the past several years, in part due to the fact that the Bank of Canada has not changed its lending rate in two years coming this September. Therefore, although there is a chance that within the next one to two years the variable rate could go up, it won’t change by a whole lot, and could still be a good option for those individuals who don’t mind a fluctuation of interest rates within the long term of their mortgage contract.

7 thoughts on “Variable Mortgage Interest Rate

  • Pingback: When To Refinance Home Mortgage

    • October 16, 2012 at 10:49 am

      I have a variable maoggrte. As a matter of fact I just moved it to another lender (paying the penalty) for a better variable rate ( 0.6 + prime to -.3 below prime) after only 1 year with our current lender (of a 5 year term). So yes I went from 2.85% to 1.95% on a 305K maoggrte. For me it was worth it. My payments are exactly what they were when we started at the first lender a year ago + ago when my rate was at 4.10% (just before the decline in the interest rate). I was able to knock 7 YEARS off my ammorization in 10 months (based on the annual maoggrte statement) just by leaving my payment at the higher amount while the interest rate took a dive. A fixed rate would not have allowed me to do that despite using the accelerated optoins available with fixed rates.When the interest rates increase my maoggrte will be less as I have been making payments. The increase of the variable rate will establish my new payment on my current maoggrte amount. So my breaking point today is different than what my breaking point will be July 1st when my mortage is $5K less than what it is now (and so on as the BoC rate changes). But point is that if interest rates literally doubled (ie; 2.25% to 5% for example) today then I might be worried but if they gradually increase then I will be fine. And I always have the option of removing the accerated option as well.

      • January 10, 2013 at 7:04 pm

        In an interest-only loan or the borrewor only pays interest each month. This makes it cheaper than a conventional mortgage, in which part of each month’s payment goes towards the principal and part goes towards interest. These loans have become popular because the monthly payments are lower, allowing borrewors to afford a larger home.However, these loans can be dangerous, especially in a down housing market. The interest rates are generally fixed for the first 1, 3 or 5 years. After that, they convert to a conventional loan, with a higher monthly payment. Most borrewors take on these loans because they assume they will sell the home before the interest rate increases. In a down market, they may not be able to sell. If they cannot afford the increased payment, they may have to default on the loan, and foreclose on the home. So, when the rate starts to adjust, you would need to refinance again. And, either get a fixed or another interest only adjustable. And, yes, I do believe you mean ARM. Although, if you have extra money every so often, you can pay down the principal in extra payments.

        • September 8, 2013 at 12:50 am

          it would be best to talk to an attorney that splezaciies in bankruptcy. consultations are usually free and they will be able to tell you if it is possible. also ask them if you decide to ever go back for advanced degrees or other programs of studies (which many people do I’m sure hard for you to imagine now) how that default of the student loan would impact you then in the future. Good Luck in making a hard decision.

      • January 13, 2013 at 5:13 am

        So you have a fixed rate now, and crummy cerdit, but would like to get a better rate. Do I have that right?Well, you can apply to refinance, but your rate will be based on your current cerdit. Plus you’ll have to pay all the closing costs again, which could be a few thousand dollars. In addition, many lenders will not lend as high a loan-to-value amount on a refi. If you borrowed 90% of the purchase price or more, you may not find a loan at all. It would be better to work on your cerdit, and build your equity for a couple years. You don’t know what the rates will be in the future, but it will probably not be to your benefit to refinance now. Call around and see what they have to offer. Many lenders will refund application fees if they can’t make the loan you want. What I mean is, they don’t know the rate until your cerdit is pulled. If the standard rate is 6% and once they pull the cerdit the best they can offer you is 7% and you don’t want it, you’ll get a refund. Anything other than the standard rate is a counteroffer. Be sure you know in advance how they deal with app fees and refunds.

  • October 16, 2012 at 7:45 pm

    no you will not have to pay it off.but and it is a big but! banks have been trying very hard to tgiethn up their exposures to risks, and having a equity line of credit now days is considered a the holder of second loan (equity line) may not agree for subordination,even though they are the same bank. they may also not allow you to take cash out. unless there is substantial equity exist.your best chance is going to be refinancing with the same lender,and before spending any money,you need to make certain that the line of credit holder is willing to subordinate.

    • January 13, 2013 at 6:37 am

      Every has an APR, what people refer to as bad is an ARM (adjustable rate ).An irsenett only is usually amoritized over 30yrs. But yes, you are just paying irsenett only NOT paying anything towards your principal. If after 30yrs. of paying Just the irsenett on say a $100K ,,,, after 30yrs. you would still owe $100K, at which time you would sell the home or just refinance. Most people do not pay irsenett only on the same loan for 30yrs.If you have an irsenett only loan, it is because you couldn’t afford to pay the principal as well when you first got the loan. You should contact the bank who holds your note ask if you have a pre-payment penalty OR if it would be OK to make some payments towards your principal.If you’re currently on an adjustable rate irsenett only loan, it would be better safer to refinance to a fixed loan payment. Even if it is irsenett only, just make sure you ARE able to, if you want, to make extra payments towards principal.

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