Variable Rates - Globe Story

The Globe's Rob Carrick wrote a good story yesterday summarizing the recent pressure on mortgage rates.  As he notes, many lenders have moved to prime rate on variable mortgages with no discounts. 

We'll add, however, that as of this moment there are still a few lenders offering up to prime - .65% on variable-rate mortgages.  This may change very soon.

In the story, Advent Mortgage's Jim Tourloukis says, “If I'm the average Joe, I would be taking the five-year rate right now because I don't know what's going on out there and I don't want to risk my house.  I don't think rates are going to go up, but I don't want to worry about it.”

If you've got good equity and cash flow, however, a good discounted variable is still worth considering.

Comments

[Kristina]

Could someone email me the name of lenders that have the 4.99% 5 year posted rates?

knielsen@shaw.ca

[Gean Oliveira]

I'd say, if you don't mind, you could add the information on this post.

Thanks.

[Pete D.]

I don't think anyone has 4.99% anymore.

Can Tire Bank seems the lowest at 5.25%.

[Patrick]

I signed up last month for a variable mortgage at prime - 0,25, with a ceiling. It is for me the best compromise between a variable mortgage with no ceiling and a fixed one.

[Mike H]

Mathematically these capped variable mortgages seem like a bad choice. You are guaranteed to give up at least 1/4% to 1/2% on the interest rate (a lot of money) in exchange for an "assurance" you won't pay more than 2-2.5% higher than current market rates. The odds of rates going up and averaging that much higher for five full years are slim.

Mike

[Melissa]

I am wondering if I should lock into a five year...or stick with my veriable mortgage~here is my info...what do you think?

Current Mtg. information: Variable rate 4.00 (Prime 4.75% - .75 discount) bi-weekly payment Prin. Plus Int. & Insurance =$450.04

If you were to convert to a Fixed 5 year term: current 5 year posted rate 7.20% - 1.30% (Discount) = 5.90% - new bi-weekly payment Prin. & Int. & Insurance = $511.80. A difference of 61.76 bi-weekly.