Mortgage Options

September 27, 2022

Hey, it’s Walter Monteiro here from Remax getting some questions lately from past clients in terms of, their mortgages coming up.

What do we do?

Do we go variable?

Do we lock in for five years?

One year, two year, three years?

Well, first of all, my crystal ball is broken.

I have no idea, but here’s what I hear from the talking heads.

The talking heads are saying, if you’ve got the guts to do it, then go with a variable.

Now you have to decide whether you want to go with an adjustable rate variable or a static payment. That’s, that’s totally up to you. And of course, that’s gonna depend on the lending institution that you’re, your mortgage is also with, which you can also switch out to, by the way, if you wanted to.

In terms of locked in rates.

I’m hearing the experts are saying stay away from the five year rate because the one year, two year, three year, they all seem to be about the same or at least very, very close.

And the last thing you want to do is get locked in to a a five year rate, especially if by chance we are at a, at an interest rate high, then you don’t want to get into that because, you know, I, I heard a long time ago that the average life of a five year mortgage is 38 months.

So that means that you’re likely going to break it. And I also heard earlier today that one of the major banks, one of the major five banks, a third of their profit came from mortgage penalties. Mortgage penalties from chartered banks are very severe because of the way they register them.

So be very careful. Talk to a mortgage professional before you get locked into any kind of mortgage and make sure you understand the penalties and how they calculate them. Cause if you go with a, one of the major five banks and they have, you know, the collateral charge they can be very nasty on their penalties. So just be very careful.

I guess my main advice here more than anything would be consult with your mortgage professional and make your decision from there.