Credit / Downpayment / First Time Home Buyer / Income / Lenders / Mortgage Renewal / New to Canada / Pre-Approvals / Purchase / Qualifying / Quizzes / Rates & Terms / Refinance / Rental Properties / Rules / Variable Interest Rates

Which Rate Is Right For You?

Picking an interest rate and mortgage term that is right for you can be a daunting task for some. First you have to decide if you want to take a fixed or variable interest rate, then you need to determine what term length suits you best. In addition to that, you then choose between a closed or open term and lastly, you choose the amortization you want. Seems like a lot of decisions to make? Get your pen and narrow down the pickings by taking a fun quiz to help you determine which rate and term suits your needs best.

1.  Have you had a mortgage before?

A. No

B. Yes

C. Sort of

2. Are you on a strict monthly budget or do you have some wiggle room?

A. Strict Budget

B. Wiggle Room

C. Not sure yet

3. What is more important to you?

A. Mortgage payment stability

B. Potential mortgage interest savings

C. Uncertain

4. Do you plan on using your mortgage pre-payment privileges?

A. No

B. Yes

C. Maybe

5. Are you worried about rising interest rates?

A. Yes

B. No

C. Kinda

6. Do you plan on making a move within the next 3 years?

A. No

B. Yes

C. It’s up in the air

7. Is it important you know exactly how much your mortgage balance will be at the end of your term?

A. Yes

B. No

C. It’d be nice to know

8. Do you pay attention to economic news and trends?

A. No

B. Yes

C. Sometimes

9. Are you financing a rental property?

A. Yes

B. No

C. Not sure yet

10. Do you plan on making a change to your financial profile in the near future? For example, maternity leave, going back to school, job change, etc.

A. Yes

B. No

C. Uncertain

11. Do you have experience with revolving debt payments, like credit card, or line of credit, etc?

A. No

B. Yes

C. Sort of

12. Are you interested in a home equity line of credit product?

A. No

B. Yes

C. Maybe

13. When it comes to your finances, how do you play it?

A. Safe and sound

B. Risky and potentially rewarding

C. Little bit of both

14. Do you have some savings available in case of emergencies?

A. No

B. Yes

C. It fluctuates

15. Do you have other significant debts you are currently paying monthly?

A. Yes

B. No

C. Not really sure

16. Do you plan on taking a mortgage term that is longer than 5 years? (There are 7 and 10 year terms available)

A. Yes

B. No

C. Maybe

17. Do you have to state your income in order to qualify for a mortgage?

A. Yes

B. No

C. Uncertain

18. Do you have good credit?

A. No

B. Yes

C. Not sure

19. Do you have more than 5% downpayment available?

A. No

B. Yes

C. Haven’t determined that yet

20. Do you plan on keeping an eye on your mortgage or letting it be?

A. Let it be

B. Watchful eye

C. I’m undecided

Hopefully this quiz helped steer you towards a rate option that works for you. If not, a detailed conversation with your favorite mortgage professional is in order. When committing to a large debt like a mortgage, be sure to explore all the options available to you before choosing a rate and term for your financing.

Mostly A’s

Fixed it is

A fixed rate mortgage offers interest rate and payment stability, a predetermined amount goes toward interest and principal, and a low qualifying rate on a 5-year term. This can be appealing to the budget conscious, first-time homebuyers, and cash flow conscious investment property owners.  Fixed rate terms mostly come in lengths between 1 and 10 years, offering the maximum amount of financing length options. In addition to that, most fixed terms offer flexible pre-payment privileges and reasonable payout penalties.

Mostly B’s

Variable is the way 

The variable rate mortgage features a few different product options including the Home Equity Line of Credit, open term, and closed variable rate term. Variable rate mortgage terms have historically seen interest savings over their fixed rate counterparts. Since the interest rate of a variable product fluctuates with prime rate, be prepared for the possibility that your mortgage payment could change at some point during your mortgage term. This is why it is recommended a borrower taking a variable rate be prepared for fluctuating payments by having experience with variable payments and access to funds for an increase in mortgage costs.

Mostly C’s

Explore the pros and cons

If you find yourself circling mostly C’s, further research is required. I recommend taking an in-depth look at the pros and cons of the rate and term options available to you. If you’re still undecided at that point, talk with an experienced mortgage professional to get some recommendations based on your financing priorities.

If you’re looking for an experienced Mortgage Broker, contact the Mortgagegirl at 780.433.8412 or info@mortgagegirl.ca. Stay in the loop by following on Twitter @mortgagegirlca.

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3 thoughts on “Which Rate Is Right For You?

  1. Heya! I realize this is sort of off-topic however I needed to
    ask. Does operating a well-established blog like yours
    take a large amount of work? I am brand new to running a blog but I do write in my
    journal every day. I’d like to start a blog so I can easily share my experience and
    feelings online. Please let me know if you have any recommendations or tips for
    brand new aspiring blog owners. Thankyou!

    • Hiya Gloria! I personally put about 4 hours a week into the blog content and maintenance, and then a few minutes here and there to answer or approve comments. I enjoy writing about my topic, so I don’t consider her it work as much as a hobby I enjoy. If I could share one tip, it would be to keep your content original and engaging. Good luck & I hope this helps!

  2. Pingback: Mortgage Payment Basics |

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