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Blog By Tony Marchigiano

Ultra-low interest rates will continue to support affordability within the housing market in Canada. The recent market turmoil and uncertainty for the recovery of the world's economy is predicted to keep rates low for sometime to come. They may even fall some more depending on what rates you are looking at. Let me explain...

The difference between a Fixed and a Variable rate mortgage has shrunk in recent weeks. This is due to the fact that it has got more expensive for lending institutions to raise money for their borrowing clients for short term financing as well as variable rates. This is reflected in, not an increase in the prime rate, but a decrease in the amount of discount off of the Prime rate available. At the same time fixed rate mortgages have dropped due to the same turmoil and uncertainty. You can currently get a fixed rate for about 3.54% and a variable at 2.55%. Only 1% difference. So we come back to that popular question again "Do I go fixed or variable?" There is an argument for both and everyone's circumstance and situation is unique. This is why it pays to get the right advice from the beginning, not only regarding rate, but for many other aspects of financing a home including one of the most important questions, "How do I pay it off sooner?" 


Tony Marchigiano | Mortgage Specialist - Mortgage Sales BC Region, RBC Royal Bank | Royal Bank of Canada | T. 604-505-7109 | F. 778-737-0054
 

 

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