Record Breaking Lows Coming to an End? - DLC NasaKasa

Record Breaking Lows Coming to an End?

Record Breaking Lows Coming to an End?

A mortgage is more than just a number. When deciding what type of mortgage would suit your needs the most, you should understand all types of mortgages and their pros and cons. The easiest way is to work with a mortgage professional. Mortgage brokers and agents are licensed professionals with knowledge and insight about the mortgage industry. You can consult one of the brokers at Dominion Lending Centres NasaKasa – Jack Nasarzewski and Karolina Horta. They are mortgage experts and have helped individuals secure the best mortgage over the last 30 years.

A variable rate for a mortgage fluctuates as per market conditions; lenders can change the interest rate higher or lower depending on the prime rate. Variable rates have always attracted a large number of consumers, typically due to the initial rate. Variable rates tend to be marginally cheaper than fixed rates because it possesses a low risk for the lenders. You can also choose to lock in with a fixed mortgage term at any time of the period. Additionally, the penalties for exiting a variable rate mortgage are a lot less expensive, capped at three months worth of interest.   

When you have a fixed-rate mortgage, this means your interest rate, along with your monthly payments, will remain the same for the entirety of the term. Most people who live on a strict budget prefer a fixed mortgage as it provides a sense of comfort and stability. Although with a fixed-rate mortgage, if the prime rate reduces, you are unfortunately stuck with the initial rate for the remainder of the mortgage term unless you choose to pay the prepayment penalty fees. With rates at an all-time historical low, mortgage agents strongly recommend trying to get a longer-term because the chances of the rates dropping any lower are very doubtful. Five-year fixed-rate mortgages account for 66% of the Ontario mortgages. Fixed rates had always been a little more expensive than variable rates as it remains unchanged; as of 2019, the roles reversed.

According to historical data, the last time anything like this has been seen was just before the 1990’s recession. This unlikely turn of events seems to be coming to an end shortly, with signs showing that rates could start to rise. With rising yields in the bond market, lenders are beginning to warn mortgage brokers of the potential increase in interest rates. It would only affect the fixed rates; thus, the variable rate would still be a great option. Mortgage professionals recommend that if you are in the market for a fixed-rate mortgage, this would be a prime time to get locked in as these rates won’t last forever. At this point, lenders have not increased interest rates. 

If you have a good credit score and need a mortgage in the next 30-90 days, do not delay taking the right step and get pre-approved.

Dominion Lending Centres NasaKasa

Dominion Lending Centres NasaKasa works with their clients after understanding the requirements and current and future market trends protecting their interest. You can reach us at 905.997.7001 or email us at mtg@nasakasa.com today to begin your pre-approval process.