Canadian’s continue to enjoy some of the lowest mortgage rates ever recorded. While there’s no clear indication on when the rates will turn the corner towards an upswing, most (myself included) are considering to refinance their home loans. I only have 1.5 years left on my current mortgage term, so it’s natural for myself to consider other options. But refinancing in order to take advantage for the lower rates is not for everyone, and even though I’m far from a mortgage expert, if you are still years away from renewing your mortgage, it can come at a cost.
So it’s best to crunch the numbers yourself and talk to a mortgage professional in order to deem what the best option might be for you. But for the rest of us in full refinance mode or those looking for their first mortgage, I’ve come across a pretty neat website that does mortgage comparison with ease.
LowestRates.ca is a Canadian based website that compares mortgage, insurance and credit-card rates on top of already offering some very low mortgage rates for people like myself who are looking to refinance, those looking for a second mortgage and the first home buyers.
Since buying a home is the most significant financial decision most of us will ever make, it’s only wise to partner our selves up with the right mortgage. It’s important to choose a mortgage that suits your unique needs and minimizes the amount of interest you pay. That’s where LowestRates.ca comes in by offering a one stop shop for mortgage comparison through a wide variety of tools.
Borrowers need to take a look at their borrowing needs as a whole, not just their mortgage. Even though mortgage rates are likely the cheapest way to borrow money, refinancing your mortgage still may not be the best option. Even though in most instances the rate will be lower than the conventional credit-card or line-of-credit rate, you need to keep in mind that you lose the flexibility you may need down the road.
Refinancing your mortgage is bigger than just deciding you’re going to refinance. It is really taking a complete checkup on your current finances and understanding what rates you have out there. While variable-rate mortgages are influenced by a bank’s prime rate and in turn the Bank of Canada’s key rate, fixed-rate mortgages are affected by the bond market – something that you should always bare in mind.
As noted above that refinancing your mortgage is not always the best option, especially if you have years left on your current term. The penalty banks charge for breaking and refinancing a mortgage depends on the size of a mortgage and the number of years left remaining on it, and could cost tens of thousands of dollars.
Currently, the mortgage rate market presents a good opportunity for anyone looking for a mortgage. Due to decreased yields on bonds and increased competition between lenders fixed mortgage rates are near their lowest. However, interest rates are predicted to increase – but nobody can predict exactly when. So keeping that in mind, here are your mortgage rate options:
Fixed Rates – This is an attractive option at the moment because rates are low, and it is almost certain variable rates will rise in the near future. However, it is unclear by how much variable rates will increase or if they will pass the levels of the current fixed rates. Opting for a fixed mortgage now locks in the current rate for a specified term.
Variable Rates – Statistically, variable rates have shown to save more interest for home buyers in the long term, but you are susceptible to market fluctuations. If you are concerned about possible rate increases, your mortgage provider may be able to provide you with a 120-day rate guarantee. Variable rates are best for those who are financially secure and comfortable with some instability.
Blended Combination - You could distribute your mortgage debt between a fixed rate and a variable rate, which allows you to reap the benefits of both options.
Rates and mortgage product information is always changing, so it’s best to arm yourself with knowledge ahead of time before signing on the dotted line. There are many options, and not all of them may be right for you and your situation. Keep in mind that everyone’s situation is unique, but there’s something out there for everyone.
Readers, what are your thoughts on mortgage refinancing? What’s your experience been with refinancing?
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