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What are the Differences Between Fixed and Variable Mortgage Rates?

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Arron Strokes

It is possible that the mortgage rates you get in Vancouver are going to be different compared to the rates that you will see in other Canadian cities. The fact that you live in Vancouver is just part of the reason. You may need to look at the competition among the lenders to offer the lowest rates. Vancouver will often have more competition so you are able to get better rates, though this is not always the case. The rate is an important determinant in how much you will pay for the loan of the home, but one thing that you need to consider is a variable or a fixed rate on the loan.

 

Variable rates are going to be the ones that will change over the term of the mortgage. If the rates change, then your interest will go up or down. These mortgages can range from one to ten years. On the other hand, if you have a fixed rate, then it is going to stay the same amount, no matter how long your mortgage lasts or what the prime rate will do while you own that loan. The one that is right for you will depend on your financial situation and what you like the most.

 

The main advantage of having a variable rate is that if it is possible rates will fall across the market sometime soon, then you will see your rate drop down automatically, without having to refinance or worry about taking any more work to make that happen. The downside to this one is that it is possible the rates will go up as well. This can mean that you will pay more on the regular mortgage payment and can make it harder to afford the home later on.

 

You can also choose to work at a fixed rate. The advantage of this one is that the regular mortgage payments will always stay the same for the entire term of the loan. This can keep you safe if the rates go up, but can mean you are stuck with a refinance if you want to get the savings and the rates go down.

 

Finding the right loans in Vancouver will be important if you would like to get ahead and have a mortgage that will help you get into a home. Comparing the differences between fixed and variable mortgage rates will help you make a decision that is smart for your needs. Take a look at some of the options in mortgages for your needs and see which type of mortgage is going to be the right one for your home buying needs. 

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