Renewal – are you considering moving from your current variable rate to a rixed Rate?

After a few years of higher rates, some borrowers who were in a variable may consider moving to a fixed rate at renewal because they feel it is a more stable option for them.

Here are some benefits of making this switch:

Stability in Payments

With a fixed-rate mortgage, your monthly payments stay the same throughout the life of the loan. This consistency makes budgeting easier and can protect you from potential interest rate hikes that could increase your payments with a variable-rate mortgage.

Protection Against Interest Rate Increases

Switching to a fixed-rate mortgage ensures you are protected from rising interest rates. If market rates go up, your mortgage rate and monthly payments remain unchanged, providing financial security and peace of mind.

Long-Term Planning

Fixed-rate mortgages are great for long-term planning and financial stability. You can predict your housing expenses over the entire loan term and this makes it easier to manage your overall budget and achieve your financial goals.

Risk Management

Locking in a fixed interest rate reduces the risk of future interest rate hikes, and as such provides financial protection and reduces uncertainty.

Potential Savings

In some economic environments, fixed-rate mortgages might offer lower interest rates compared to variable-rate mortgages.  No one can predict the future of rates, so you will never know up front which option will end up saving you the most money over the term and life of your mortgage. You are making the best choice based on the information you have and your current goals.

Easier Financial Planning

Fixed-rate mortgages simplify financial planning. You won’t need to anticipate and adapt to changes in interest rates, allowing you to confidently plan for other financial goals and expenditures without the worry of fluctuating mortgage payments.

Overall, moving from a variable-rate to a fixed-rate mortgage offers stability, protection, and peace of mind. It’s an option for homeowners, especially those seeking long-term financial security.

The best advice is always to discuss your goals and options with your mortgage broker.  There is no one size fits all mortgage type.

Nicole Crichton