First time condo owner - Fixed or variable mortgage?

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Joined: Thu Sep 18, 2008 9:41 pm

First time condo owner - Fixed or variable mortgage?

Postby NinaJosephine » Thu Sep 18, 2008 10:17 pm

My head is reeling. I was set on a fixed mortgage (25 years), lowest rate I could find.
Went to RBC bank and the representative is trying to convince me to go variable. She says I'll save a lot of money in the long run, that with what's happening in the States and a recession heading this way, that the rates will not raise wildly and that I'd be a fool to choose a fixed rate over 25 years instead. Is she for real or is she simply trying to get my business and says whatever to secure me as a client? She also says that if I get insecure at any time, I can request a fixed rate (although I cannot switch back once I've made that decision). She makes the whole thing sound very attractive but what are the actual drawbacks? She told me something about my payments never changing but the amortization period changing with fluctuating rates? Is that risky? Could I end up paying, say, an extra year of payments because of a high rate?
And do I check the rates monthly? And if so, where? I've never owned a property before and I'm a complete beginner at this...

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Joined: Tue Aug 26, 2008 12:40 pm
Location: USA

Re: First time condo owner - Fixed or variable mortgage?

Postby proplanner » Sat Sep 20, 2008 11:14 am

Have you talked to your financial planner regarding this. If not, consult him and he is the best person who can give you some really good and useful suggestions.

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Re: First time condo owner - Fixed or variable mortgage?

Postby theway » Mon Oct 20, 2008 2:43 pm

The interest rates are going much higher from here, to compensate for the horrendous inflation that's on the way. Most people are scared from deflation, because they see their home values decline, etc., however this won't last long, with all the money the world governments are printing (bailouts, handouts, stimulus packages, bank nationalizations, etc.)

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Re: First time condo owner - Fixed or variable mortgage?

Postby kristen » Tue Nov 11, 2008 3:19 pm

I would not go with variable rate. If you can lock on a low rate for 25 years just do it. I find that most mortgage and any other financial advisers are complete and utter fools. They tell you what they were taught and they don't think with their heads. So don't listen to them.

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