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Fixed or variable: What’s the best mortgage strategy for you?


Blog by Marites Kliem PREC* | November 3rd, 2006


 

A variable rate mortgage allows the borrower to take advantage of low rates – the interest rate is    calculated on an ongoing basis at prime minus a set percentage.  (Prime is the base rate that banks use in pricing loans to their best and 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. 

Gunars Strauts--Origin Mortgage Group http://www.origingroup.ca