02/04/2022
Couple of FAQs in the mortgage industry are:
1. What's the difference between Fixed and Variable rate mortgages?
2. Which one is better-which should I choose?
Both types of mortgages have their Pros and Cons:
🔻 For a fixed rate mortgages, borrowers have the confidence of knowing when they will pay off their mortgage. This qllows someone to budget accurately every month. Because they know what their payment will be for the mortgage term. At the same time, the interest rate on a fixed mortgage is typically higher than variable. Plus, should the borrower decide to end the mortgage prematurely for any reason, they will incur greater penalties than a variable rate.
🔺️ For a variable rate mortgages, the interest rate is typically lower than a fixed rate. Should the prime rate increase, a greater portion of the payment will allocated to interest. If the rate falls, more will go toward principal.
❗ Those who have a variable rate mortgage and are concerned about rate increase in the future, can transfer to a fixed rate mortgage at any time❗
If you are looking for a mortgage and want more information about types of rates, I'm here to share the knowledge and help you find the perfect fit for your needs and future goals
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