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Originally Posted by heep223
But then again I'm not a mortgage professional. Do mortgage brokers get paid differently whether they sell fixed vs. variable?
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You're right, no one knows when rates are going to go up. However, the majority are expecting late 2015, early 2016, like I said. Of course there is more inherent risk with a variable mortgage, which is why they are debt serviced accordingly at the BOC benchmark rate of 4.79%. Slightly higher risk, but can be high reward as well. Again, even if (and this is a big if) prime all of a sudden went up to 3.75%, you're still on par with current fixed rates. You can then lock into a fixed rate at for the remaining term, or continue with the variable. I cannot see prime making that big of a jump instantaneously.
Keep in mind that a variable rate can be locked into a fixed at any point in time. Part of my job is to make sure clients are fully aware of what they're getting into. If debt servicing is really tight and I don't think clients could handle a variable rate, then I may lean them towards a fixed mortgage. Again, it's client specific. That's what I love about being in the broker channel, I have a wide array of options and products. I would never put a client in a product such as the all in one I speak so highly of if I don't think they're responsible enough financially either. (Or if the significant other isn't responsible enough with all the accessible equity!
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At the end of the day, if I don't place my clients in a suitable product, it's going to look bad on me, and obviously is not how I want to build my business.