Mortgage discussion and advice

[Mitcheh]

Thought maybe I could lend a hand to everyone here and offer advice/answer any questions in regards to mortgages in Canada. I've been a Mortgage Specialist with BMO for 6 months now (spent 4.5 years with Scotiabank before, so I'm not new to this by any means).

If anyone is interested in a review, to see if they can take advantage of record low interest rates (even though prime went up today, fuuuuu), let me know. I'm happy to do the math, and see if there's a beneficial option involving either paying a penalty, rolling a penalty into your mortgage OR using cashback to offset it.

I've done 2 mortgages for Graeme, and I'm pretty sure he's happy thus far (he kinda just does what I tell him to do).

I'll start off with a question - how we all feel about variable vs. fixed mortgages right now?

[Khyron]

Re: Mortgage discussion and advice

You'd have to be nuts to go fixed.

Mine is prime -.75 for another year I believe.

[Mitcheh]

Re: Mortgage discussion and advice

Haha I wouldn't say "nuts", but very risk-averse... 85% of my clients this year have gone variable and not because I pushed them into it, I educate them on both and they always like the low rate option.

My rental is at prime - .75% too, I'm hoping with the increase in prime today, we are given more discretion on the variable so I can start offering -.75% again!

[RONDAL]

Re: Mortgage discussion and advice

you dont have to be nuts on fixed by any means. not 90 days ago the BOC was making statements that rates were going up, and they would be moving up quickly. then the greek debt crisis happend and markets came back down and things cooled off.
Canada is walking an interesting line at the moment. we're well ahead of the rest of the world in how our recovery is going, and the gov't is going to have to work overtime to keep inflation under wraps in the next 24 months

[Mitcheh]

Re: Mortgage discussion and advice

It's all a matter of how comfortable with payment and/or rate changes you are. Of course rates are going up, but you have to weigh out the option of starting out in the low 2s and potentially getting up to 4% or 5% over the next 2-3 years versus starting around 4.5% and staying there for 5 years.

The interest savings while your rate is climbing are very significant, especially for a client who's looking to take advantage of their pre-payment priviledges and pay the mortgage down as fast as possible.

You always have the option to lock into a 5 year fixed mortgage at any time without a penalty, so that's always there to offer peace of mind.

My new mortgage will be variable, that's for sure.