Economic troubles and lender profit motives may all have conspired to shrink variable discounts beyond our expectations and as a result, Fixed rates are gaining in popularity.
We have an unusually small 50+/- basis point spread between Fixed rates and Variable rates. A spread that tight doesn’t come around very often. And..., it might even make you go as far as to rethink all of the historic research that suggests variables are the way to go! For most of us who are “financially secure borrowers” and who do not plan to break their mortgage within the next 4-5 years. I would give serious consideration, and look at the Fixed 4yr term at 2.99% as an alternative to the Fixed 5yr and even the VRM mortgage.
In my opinion, choosing the Fixed 5yr (although attractive, even at 3.29%) carries a fairly high rate premium for that extra years’ worth of rate protection. With the Variable rate discounting being all but eliminated, the 4yr Fixed is becoming a favorite among mortgage borrowers.
To discuss this topic further, give me a call and we can set up an appointment to go over your specific set of circumstances.
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