Fixed
vs Variable Refinancing Rates: A Guide for Calgary Homeowner
Are you planning to refinance a mortgage in Calgary? If so, one of the major decisions you will face is between fixed v/s Variable Mortgage in Calgary.
It is advisable to work with a professional service provider who will help you choose the best refinance rates based on your financial goals, risk tolerance and current economic climate.
What Fixed Mortgage Refinancing Rates in Calgary?
A fixed-rate mortgage means your interest rate and monthly payments remain the same for the entire term of the loan. This means even if the Bank of Canada raises or lowers rates, your payment will not change. These stable refinancing rates offer peace of mind and predictability, especially if you are budgeting on a fixed income or planning long-term in your home.
What are the benefits of Fixed Rates?
They exude stability, perfect for a rising rate environment
They are budget-friendly, making it easier to plan monthly expenses
They are great for homeowners who have stayed in their home for more than 5 years.
However, the fixed rates have a few drawbacks, including that they have higher initial interest rates and are less flexible for early payout or switching.
What are Variable Mortgage Refinancing Rates in Calgary?
In the variable refinancing rates, the interest rate fluctuates according to the lender’s prime rate, which is tied to the Bank of Canada’s policy rate. As the rate changes, so does your mortgage payment or how much of the payment goes for interest v/s principal.
What are the benefits of Variable Rates in Calgary?
The lower initial rates offer more affordable upfront.
The borrower will have to pay less over the life of the mortgage if rates remain low.
They are flexible options, making it easier for the borrowers to break or convert to fixed rates later.
However, the variable rates have a drawback of uncertainty, where the payment increases with the rising interest rates.
Fixed v/s Variable Refinance: What Should Homeowners in Canada Consider?
Recently, there have been fluctuating interest rates in Calgary, due to the Bank of Canada battling inflation and market volatility. If you feel the rates may stabilize or drop, a variable rate
will help you save money. However, if you expect the rates to rise or simply prefer peace of mind, a fixed rate is an ideal option to be on the safer side.
Consult an experienced mortgage broker who will help you make an informed choice.
Best Refinance Rates for you in Calgary
Choose Fixed Rate if you value stability, plan to stay long-term or expect rates to rise.
Choose Variable Rate: You are financially flexible, comfortable with risk or expect the rates to decrease.
When confused about mortgage rate comparison in Calgary, work with a professional mortgage advisor who understands the real estate market of Canada.
Refinancing your mortgage is a smart decision, but only with the right strategy.
A well-informed choice today will lead to savings tomorrow. Speak with a local mortgage expert today to explore what works best for your goals.
Source:- https://mortgageblogs.hashnode.dev/fixed-vs-variable-refinancing-rates-which-is-better-forcalgary-home-owners