Quote:
Originally Posted by Yappin Tappin
Hey guys,
With this drop in the interest rate, I was wondering what some of your thoughts are on going for a fixed rate for a mortgage? I know the common thought process is over the long run a variable rate is the better way to go, but with the rate being so low now would choosing a fixed rate be a smart move or would variable still be better?
Also, do you think now would be a good time to purchase my first home or should I wait a bit more? I've read a few articles after the oil prices dropped saying they expect housing prices will stay roughly the same in Alberta this year. I currently would be close to affording 20% down for a house around 400-450k, so should I strike soon?
Sorry, I'm not the most knowledgeable when it comes this stuff so I'd love to hear everyone's thoughts.
Thanks!
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You really can't go wrong with a fixed rate these days with them being historically low. I do however think there is still good value in a variable rate, as they're also extremely low and could potentially survive a few prime rate hikes and still out-perform current 5 year fixed rates. It really depends on where you're comfortable. If you like the peace of mind knowing your interest rate and payment will not change for your full term, then go with a fixed. If you're OK going to sleep at night knowing your interest rate and payment could change tomorrow (and you can handle it financially), then a variable mortgage may be right for you.
As for when to buy, it's pretty tough to say. There is lots of inventory, but not as many sales. Leads me to believe there needs to be an adjustment of some sort, and I think there will be a small one. If you're OK hanging tight for a little while, then it may not be a bad idea.