(Closed) Fixed or Variable?

posted 6 years ago in Home
  • poll: At current *Canadian* rates I would go with
    Fixed - 1 Yr : (0 votes)
    Fixed - 2 Yrs : (0 votes)
    Fixed 3-4 Ys : (0 votes)
    Fixed - 5 Yrs ~ 3% : (1 votes)
    4 %
    Fixed - 6-9 Yrs : (1 votes)
    4 %
    Fixed - 10 Yrs ~ 4% : (1 votes)
    4 %
    Fixed - Other : (19 votes)
    73 %
    Variable - Usually recommended as historically you pay less interest. Your payments may be fixed. : (4 votes)
    15 %
    Other : (0 votes)
  • Post # 3
    Member
    14496 posts
    Honey Beekeeper
    • Wedding: June 2011

    Wow, standard mortgage here in the states I thought was 30 years or 15 years, with most people opting for 30.  I have a fixed 30.

    Post # 4
    Member
    5494 posts
    Bee Keeper
    • Wedding: August 2011

    We have a fixed 30 year mortgage.

    Post # 6
    Member
    1659 posts
    Bumble bee
    • Wedding: July 2012

    Fixed 30 – I wouldn’t consider anything else.

    Post # 8
    Member
    205 posts
    Helper bee
    • Wedding: March 2013

    You should never to take the variable. That’s the reason why so many people nowadays are in mortage trouble. Essentially the fixed is your rate is guarateed for 30 years. At this point in time, rates aren’t going to get any lower and if it does, you could also refinance to save yourselve some money. 

    But with variables, you’re taking a super reduced rate for a couple years, but then you’re stuck with the rate at the time your introductory period ends. This has gotten a lot of people because while they could initially keep up with their mortage payments since their interest rate was 2-3%, once it jumped up to 6-8% (interest rate is not guaranteed until your introductory period is over) you’re now required topay way more money that you might not have otherwise had or saved up for. 

    It’s attractive, but trapping if you don’t refinance before your introductory period is up or if you really don’t have the savings to pay for your mortgage at a higher rate. 

    Post # 10
    Member
    205 posts
    Helper bee
    • Wedding: March 2013

    @AB Bride – that may be the difference between the US and Canada. We opted for a 30 year fixed rate simply it’s a safer alternative to the variable rate and we intend on ultimately purchasing a larger house and using our current one as a rental property. 

    A lot of people here in the states and largely California were real estate was so expensive for so long were forced into short sales and foreclosures because their rates jumped to a price payment that they could not afford. 

    Also if you don’t plan on staying at your house for more than 5 years, a variable rate may be attractive since you’re going to be unloading the house before the introductory period is over. 

    Post # 11
    Member
    8394 posts
    Bumble Beekeeper
    • Wedding: August 2012

    I think ours was a fixed 10 year with a balloon payment at the end, but it was an odd situation because my parents gifted us part of the house value. If that hadn’t happened we would have done a fixed 30 year.

    Post # 14
    Member
    3886 posts
    Honey bee
    • Wedding: September 2011

    At current rates I’d do a fixed 30-year.  No real point in committing to a fixed 15 year; just double the payment on your 30-year note and it’ll cost you the same as if you’d opted for the 15-year note, but you still have the option of paying the single amount if your finances change.

    I’d also add that if you’re considering a 40- or 50-year note because it gets you in a bigger or nicer house, then that is not the house for you.

    Not buying within one’s means has contributed significantly to the real estate meltdown. It’s not only the bankers who should be ashamed of themselves but the customers too.  If risky borrowers hadn’t been in such a hurry to sign up, the bankers would have had done far less damage. Just makes me a little sad that people are all too willing to blame the bankers without blaming the consumers— it takes two to tango and all…

    Post # 16
    Member
    8394 posts
    Bumble Beekeeper
    • Wedding: August 2012

    @AB Bride:  If I’m reading their chart correctly my bank shows 3.5% for a 30 year fixed mortgage.

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