hi friends,
i wanted to know that is a fixed mortgage with 4.55 % intrest better
or a floating(open) with 3.7 % ?
There are pros and cons for either side of the argument. With a fixed rate your cash outflow on account of the mortgage repayment is fixed and effectively you've taken an insurance against any future increases in the interest rates. However, in a market where the interest rates are going down you could have paid less if you've taken a floating rate mortgage.
With the current low interest rates maybe it's better to go for a variable interest rates or alternatively take a 1 year fixed interest rate which carries a lesser interest rate than a 3-year or 5-year fixed interest rate - which is what I did as I wanted to see how this year goes and then decide accordingly. This is my opinion
Daks
Quote:
Orginally posted by saba
hi friends,
i wanted to know that is a fixed mortgage with 4.55 % intrest better
or a floating(open) with 3.7 % ?
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
hi
thanx a lot for ur replies.
i am still confused a lot
i can get a variable mortgage for 3% intrest rate or closed mortgage for 4.15 % ,the intrest rate for floting is very good(3.00%) but i am afraid that it may go high and i will have to pay more n more after every 3 months,if the mortgage rates will go high!
will the intrest rates go high??
plz help
Quote:
Orginally posted by saba
hi
thanx a lot for ur replies.
i am still confused a lot
i can get a variable mortgage for 3% intrest rate or closed mortgage for 4.15 % ,the intrest rate for floting is very good(3.00%) but i am afraid that it may go high and i will have to pay more n more after every 3 months,if the mortgage rates will go high!
will the intrest rates go high??
plz help
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
saba,
i was in ur shoes 2 1/2 months ago. we are very low risk takers
some of cons what i saw in
5 year variable: since we put alesser down we would not be able to refinance until 5 years but sure the interest varies with prime adn the lowest.
5 year fixed: this is rip off. for 5 years u end up paying much more but yes you have the assurance that you can afford to pay the mortage amoutn for 5 years even if the prime goes much higher
1 year: best to refinance and the rate is little more than prime
we went with the option of 1 year and went to take a risk. i don't see very much of change in prime for another year. the next time we refinance we will go with the variable. if you do a spread sheet, even if th prime goes up you end up paying much lesser in a variable then a fixed.
i would say go for it. I would have been stupid to take the 5 year closed
I want to give my own example for which I choose a fixed one last year though I hads the open in the begaining in the year 2002 but closed in 2003 sept as I feared increse in mortgage rates and now in my opinion rates are not going to drop any more and will start going up so it is your decesion to choose
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