Eliminating Mortgage Mayhem

Saturday, July 17, 2010

Anja Sonnenberg

Whether you’re purchasing, refinancing or renewing your mortgage, you may have more options than you realize. It’s not just about choosing the best rate, says Eleonora Salerno, mortgage broker of The Mortgage Centre. In today’s market, most people share the same dilemma – should they choose a fixed or variable rate?

A fixed rate product means you’ll get a guaranteed fixed payment for the term you choose. A variable rate product means you’ll have a fluctuating interest rate throughout the term of your mortgage.

“On a fixed rate product you’ll be making the same payment for the next few years. This is the type of mortgage product for a conservative borrower,” says Salerno. “A variable product is more for a risk taker. It fluctuates with the Canada prime rate, so we can’t determine what your mortgage payment will be next year. But history does dictate that a variable rate does float below the fixed rate,” says Salerno. With a variable rate, Salerno says a borrower will see significant savings at the end of their mortgage, so for some, it may be worth a few sleepless nights.

If you’ve signed up for a fixed mortgage, but now you’re thinking about switching to a variable, you can break your mortgage, but you will pay a penalty.

“Another advantage to a variable mortgage is that you can switch to a fixed rate mortgage whenever you want and you won’t pay a penalty,” says Salerno.

Finding the right mortgage may sound overwhelming, but a mortgage broker can help you shop around for the best product. “Our job is to make you feel comfortable when choosing a mortgage,” suggests Salerno.

Call me to discuss your options: Leon Martin 519-503-2753 or visiting my website.