Friday, April 2, 2010
Why Are Canadians Locking In Thier Mortgage Rate?
We have seen the banks raise the posted rate by.60% this week and cause a lot of questions and confusion. I agree with all the clients that have themselves preapproved at the 5 year fixed rate. What does not make the best sense for most clients is to lock in that variable that is preime-.50,.75,.90% below prime. Prime is going to need to be raised by more then 225 basis points just to equal the current 5 year rate. That is not going to be happening overnight. If you increase your payments now(staying in the variable rate), you will be paying more principle off of your mortgage. This will also be able to help your budget by preparing for increases in prime.