Not all variable mortgages are created equal. In the current mortgage market, the spread between fixed and variable rates is very wide. Fixed rates are around 5% while variable rates are closer to 4%. As a result, most borrowers are opting for variable rate mortgages. When trying to decide which variable rate mortgage to go with, one of the most important things you need to find out about, are your lender’s “lock in privileges”. What rate you will get, if you decide to lock in to a fixed rate mortgage in the future and will the lender guarantee that in writing?
Banks advertise their posted fixed rates which are higher than the rates you be offered if you were negotiating a new fixed rate mortgage today. Knowing that you will get the best discounted rate at the time of locking in will give you peace of mind now and could save you thousands of dollars in the long run. Call me for a run down on the differences in the “lock in privileges” among Canada’s largest lenders.
