Variable Rate Mortgages — Get the Best Deals & Rates in Edmonton
Variable rate mortgages have been around for years, the entire premise is that your mortgage rate is tied to the Bank of Canada rate and every time it moves it effects the amount you are paying on your mortgage.
How Variable Rate Mortgages Work?
A variable rate mortgage works like this, if you have a discount of prime minus .50% and the prime rate is 2.70% as it is today then your mortgage interest rate would be 2.20%. If prime goes lower your payment would stay the same and you would be paying more off of your mortgage.
In the other scenario prime goes up and your payment stays the same then you are paying less to your principle and could end up in a scenario where your mortgage is in a negative situation. The bank would of course advise you of that scenario should it occur.
Best Deal for the Average Home Owner in Edmonton
Variable rate mortgages have a long history of being a better deal for the average home owner because at one point in time discounts were nearly 1% below the prime rate offered. This product is tied to the bank of Canada and the prime rate, fixed rate mortgages are tied to the bond markets and the two don’t always follow the same path. The Bank of Canada rate is very transparent and easy to follow and moves very slowly, this allows us a lot of time to advice clients when they are in a variable rate mortgage if they should lock in the rate.
Advantages of Going for a Variable Rate Mortgage in Edmonton
Some of the best features of a variable rate mortgage in Edmonton are as follows:
- These mortgages are tied to a transparent number you can see the Bank of Canada rate just about any time
- The penalties on a variable rate mortgage are always never more than 3 months interest payment compared to a fixed rate mortgage whose penalties can be tied to the interest rate differential.
- The other great feature is that lenders will allow you to lock into their fixed product without any penalty
Our Brokers for Life’s team are very skilled in helping you decide what product works best for your situation. Variable rate mortgages are not for everyone but the more secure your position in life is the more likely it is that a variable rate mortgage will fit your life style and investment knowledge.
Fill the form below to contact a local mortgage associate in Edmonton today, to discuss your Variable Rate Mortgage needs.