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The Lock Down is On

Lock-in-Mortgage More people seem to be locking in right now than at any time in the last year.  It seems people still put a high value on certainty, despite all the data about variable-rate superiority.

So that begs the question: Are variables becoming passe for the moment?

In our view, not at all. 

Prime rate would probably have to rise at least a couple of percent for most people to be better off in a fixed for the next five years.  Of course, if inflation heats up as expected, that’s not totally out of the question. 

It’s largely an odds game, and the odds (i.e. research) favour variables in the long-run, despite what’s happening today.

Trouble is, a lot of people don’t trust the odds.

If you do trust the odds, there are still a few lenders near 4% on a variable–an outstanding rate from a historical standpoint.  Add in a fixed payment and it’s like having the best of a fixed-rate and variable-rate mortgage.  You’ll get a much better rate right off the bat, and have just a little more payment risk (due to the trigger rate) than you would with a fixed-rate mortgage.