Here’s a copy of our latest market update
VARIABLE & FIXED RATE UPDATE – VARIABLE PREMIUMS?
Let’s re-cap. Over the last couple months we saw the variable go from PRIME minus .9 (2.1%) to just PRIME (3%). Now, a couple lenders are setting a new precedent and offering mortgage holders PRIME plus .1% (3.1%) and without fail all market players will follow. This variable trend is a direct result of the continued economic turmoil the world is facing. Until the economy resolves itself, we will be in a low rate environment. The ongoing debate about whether to “go variable or go fixed” is more blurred than before when the answer was more obvious. This continued compression of rates makes fixed rates quite attractive, relatively speaking. BUT, the answer is not simple. The answer lies in the very specific goals of the client; including, financial goals & investments, renovations, time in property, debt obligations, etc. Also, what is the market going to do and how will that affect rates? Are you better off to take a short term fixed rate and renegotiate earlier assuming the variable becomes more attractive again? Should you take the variable due to increased flexibility and bet on some of the economic forecasts suggesting a decrease to prime in the new year? Should you look at a medium to long term fixed rate for the insurance of knowing what you’re going to pay for the next “x” years? All in all, times are a bit turbulent, rates are all over the place and constantly changing so get in touch and book an appointment/ phone call if you want to discuss your situation and see what suits you best based on our take on interest rates and strategies.
