Fixing Your Variable Rate Mortgage?

Jeff Evans

Today could be the day you save yourself hundreds of dollars a month!

This is a quick note for everyone that has a variable rate mortgage with a bank or credit union. With the anticipated rate increases coming soon and the opportunity to get locked in right now available, many of you may be thinking about locking your mortgage in.

If you are in this position, before you do lock in, contact your lender and enquire as to what rate they will lock you in at. All the banks and most credit unions have “posted” and “discounted” rates. Posted rates are what they show on their websites, discounted rates are lower rates that they use in an attempt to compete in the marketplace for business. However, if you get a variable rate mortgage with them and then you lock in the mortgage, they will often try to lock you in at posted rates, which are usually about 1.4% higher than discounted rates for a 5 year fixed rate mortgage.

What can you do to save yourself money on your mortgage?

If you call your mortgage lender and they offer you a competitive rate to lock your mortgage in, then it may make sense for you to take the offer. If they offer you a 5 year fixed rate to lock in for a 5 year fixed rate mortgage, then you will be spending much more money on your mortgage than you have to.

Keep in mind that they could offer you a 3 year fixed mortgage rate of 4.25% and it would not be competitive. 3 year fixed rates are much less expensive than 5 year rates.

If you get an uncompetitive offer from your bank, resolve yourself to not give them your business. They clearly do not care about keeping your business and you should not reward them for an offer that I would consider insulting if I were in your shoes.

Instead, call me today, and I can qualify you for an excellent deal that will save you money. Most of my lenders take mortgage payments from whatever bank account you choose also, so it is much more convenient than most banks where they require you to open an account with them and take payments from that account.

There will be a penalty to break your variable rate mortgage, but most variable rate mortgages will only require a 3 month interest penalty.

A $300,000 variable rate mortgage at prime +1% should result in a penalty of just over $2,500. However, switching could save you $250/month. You would have saved more than the penalty in the first year alone!

Don’t delay, call me today for to save yourself money!

I hope that this is informative for you and I hope that it will result in you saving yourself some money. If you appreciate the information I present, please give me a call or write me, and let me know. I look forward to hearing from you.

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