Good Mortgage Rate?

[Bertuzzied]

Originally Posted by Slava

PM Sent.

I think that this is a fantastic product in general, and has some great benefits. I have my bias (as I've stated before), but if this is a good fit for your situation, I'm convinced that there is nothing to rival this product.

Does it just consolidate all your debt into 1 payment? What other advantages are there?

[Slava]

Originally Posted by Kobatuzzied

Does it just consolidate all your debt into 1 payment? What other advantages are there?

Well it can consolidate the debts for you if you want to do that, and have the equity to do that. But it also operates as a full chequing account as well. When you get paid and deposit that into the account it goes against the principal immediately. You can spend out of the account just like a "normal" account, but as the money sits against the principal it reduces the interest amount.

For example if you deposited $2000 then the principal owing drops that day (like a line of credit). You have access to the $2k, but if you don't spend it all in one day then it decreases the interest owing for as long as it sits there. Might seem like a small thing, but over the lifetime of a mortgage it makes a big difference.

Other advantages include the fact that you can pay as much as like without a maximum payment set, no penalties and things like that.

[Dodsdomd]

I got 5.69% fixed for 5 years. Felt alright with that.

[STAMPEDRED]

On the LoC topic, I think it is way better than a conventional mortgage... as long as you are accountable to yourself and your better half!

The reason why it is better is you can just pay the interest owing every month. You can choose to put more down every month or less as the cash flow coming in dictates, but even better yet is the money that is not being shoved into your house that you can not use now can be re-invested to make more than what you pay on interest. However, if you go buy a car or something dumb like that, this is not a good thing to have as you are just digging yourself further into a red hole!

If the OP went with that mortgage rate, I would say its alright. Anything under 6% is decent right now. At least use a mortgage broker cause they usually get a bit better rate discount off of prime. I would personally only get a mortgage over a LoC if only it was the only way to purchase a property.

[Barnes]

We got 5.49 fixed in Feb. Signed the papers tonight. Move in a week. Woot!

The biggest reason we went with a traditional mortgage is if I dont HAVE to pay, I won't.

[Incinerator]

I have a LoC and it works for me since my income flunctuates from month to month, another advantage is that, as long as you have some equity (part of that LoC paid off), you don't need to go out and get another loan if you need temporary cash flow up to that amount - note I said temporary, you have to be responsible enough to put the cash back in once you have everything worked out, like a credit card it's convenient if you use it properly and detrimental if you don't.

[V]

I have an open mortgage with a fixed rate at 5.5% signed for 5 years in August. With a 7% kickback on all interest paid at the end of the year. And I can pull as much out, or put as much in as I feel like at any time. Works for me. After using it, I've found that it's not quite as flexible as the ManulifeOne, unfortunately, but the interest rate is better, especially with the kickback going directly into the mortgage, essentially making my rate 5.09%.