With the anticipation of rates going down, some homeowners may be considering switching from a variable-rate mortgage to a fixed-rate mortgage to lock in their next term.
Stability in Payments: With a fixed-rate mortgage, your monthly payments remain consistent throughout the life of the loan. This predictability makes budgeting easier and shields you from fluctuations in interest rates that could otherwise increase your payments with a variable-rate mortgage.
Protection Against Interest Rate Increases: One of the main reasons to switch to a fixed-rate mortgage is to ensure you are protected from rising interest rates. If interest rates rise, your mortgage rate and monthly payments remain unaffected, providing financial security and peace of mind.
Long-Term Planning: Fixed-rate mortgages are ideal for long-term planning and financial stability. You can accurately forecast your housing expenses over the entire loan term, making it easier to manage your overall budget and financial goals.
Risk Management: By locking in a fixed interest rate, you mitigate the risk of future interest rate hikes, which could significantly increase your borrowing costs with a variable-rate mortgage. This strategy can provide financial protection and reduce uncertainty.
Potential Savings: In certain economic environments, fixed-rate mortgages may offer lower interest rates compared to variable-rate mortgages. By refinancing to a fixed-rate loan when rates are favorable, you could potentially secure a lower overall interest rate and save money over the life of the loan.
Easier Financial Planning: Fixed-rate mortgages simplify financial planning by eliminating the need to anticipate and adapt to changes in interest rates. You can confidently plan for other financial goals and expenditures without the uncertainty of fluctuating mortgage payments.
Overall, transitioning from a variable-rate to a fixed-rate mortgage offers stability, protection, and peace of mind, making it a favorable option for many homeowners, particularly those seeking long-term financial security. To learn more about variable vs fixed rates, check out this quick video here https://markgoode.ca/home-purchase/fixed-rate-vs-variable-rate/
Contact our Mortgage Man DLC team to discuss the options that best suit your budget and situation, we look forward to assisting you.
Source: DLC Marketing Team OurHouse