The debate between fixed-rate mortgages and variable-rate mortgages will seem to be forever because these both strategies hold strong financial footing and efficiency that both provide advantages on what thousands of mortgage consultants, lenders and planners have been assisting their clients on their decision-making. Where as the variable rates strategy seems to be getting priority in Canada and have been adopted while taking as the best mortgage strategy that can save lot of money:

According to the latest research study by one of the Canadian economic experts, Moshe Milevsky, associate professor of finance at York University, reaffirm his year 2001 conclusion that, “Canadian homeowners really do pay extra for fixed-rate mortgages over the long run”, further he shows that “variable rate mortgages hold more benefits to majority of consumers with most of the time”. He extracted his finding while taking mortgage rate data from year 1950 to 2007 and found that choosing a variable rate mortgage would have saved Canadian mortgage consumers  $20,000 in interest payments over 15 years, based on a $100,000 mortgage value. Moreover, he also found that it would have been better off with a variable rate mortgage compared to a five-year fixed rate 89 % of the time.

New mortgage application has an incredible number of options from which to choose. However, with shifting interest rates, it can be a confusing time for those looking to acquire, renew or refinance a mortgage. Getting the most advantageous mortgage strategy is important and this challenging task cant be solve with anybody else accept you. This is the question you should ask yourself: Do I want the stability of a fixed rate mortgage or am I comfortable with the potential risks and rewards of a variable rate mortgage?

A variable mortgage rates allow the borrower to take advantage of low interest rates where the interest rate is calculated on an ongoing basis at prime minus a set percentage where prime is the base rate that banks use in pricing loans to their most creditworthy customers.  A variable rate mortgage can pose challenges for some, such as financially stretched first-time buyers who may not be able to handle an increase in their mortgage payments that would usually accompany a significant rise in interest rates, and there are those who simply prefer the greater sense of stability that a five to ten year fixed term mortgage can provide.

Faced with today’s competitive mortgage market and a changing interest rate environment, credit consumers need access to the timely and quality information through a recognized and trustworthy source. Which can help them decide while looking carefully at their current situation and personal goals to determine which mortgage strategy will best meet their individual needs. Moreover, you should try to get an answer yourself after consulting your mortgage broker whether a fixed or variable mortgage is best for you.