Variable rate mortgages – a worthwhile option?

Greater risks yield greater results. The same applies when comes the time choose a mortgage. Choosing a variable rate mortgage allows you to benefit from a rate that is lower than what you would have on a 5-year term. However, this also means that the rate may fluctuate up or down. Here are a few questions you should ask yourself before making your choice:

1. Can you live with the possibility that your mortgage rate and your monthly payments might increase?
2. If mortgage rates should increase, are you in a position to cover the difference in payment?
3. Are you ready to pay more in interest rate, if it is confirmed that the payment amount will not change during the duration of the chosen term?

How about splitting the difference? Some financial institutions allow you to combine a fixed and variable mortgage within the same loan. In short, a variable  rate mortgage is a great option that may not be suitable for everyone.

Don't hesitate to contact us for a free evaluation of your current situation. We can help you take the best decision.

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