Canadian Mortgage Broker News – Big 5 banks cut fixed mortgage rates
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Canadian Mortgage Broker News – Big 5 banks cut fixed mortgage rates.
This article discusses the perceived risk of locking into a variable rate mortgage since rates are currently at historically low levels. However, can you sustain your mortgage payment when rates go up? Lender’s typically qualify clients on a posted, 3 year fixed rate to ensure that if rates are to climb, the client should still be able to maintain that client. For example, with prime rate being at 2.25%, the client is not being qualified for the loan at an interest rate of 2.25%. Instead, they are typically using the bank’s, 3 year posted rate which is currently at 4.50%. In addition, in order to qualify for a variable rate mortgage, a client’s debt service ratios follow stricter guidelines than those locking into a fixed rate mortgage.
Leah Plaizier
TMG The Mortgage Group
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