# Mortgage advice.. get fixed?



## Brian123 (Sep 4, 2010)

I currently have a 5 year open variable rate mortgage with 1 year 8 months remaining of the term. Rate is currently at 2.15%. 

I am not very knowlegable in the mortgage game, but it is my understanding that if I was to seek a fixed rate at this time it would obviously be higher. However, I would be safe if the rate went higher than my fixed rate in the future. The longer I wait the more likely I will be fixed at a higher rate if interest rates continue to rise. 

Is what I am saying accurate? Should I lock my rate in ASAP? Should I wait until the end of my term? Open to any advice on the issue. Also we are keeping an eye out for another house anyways, but dont expect we will be buying anytime soon unless its exactly what we want at an amazing price.


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## Shayne (Apr 3, 2009)

Brian123 said:


> I currently have a 5 year open variable rate mortgage with 1 year 8 months remaining of the term. Rate is currently at 2.15%.
> 
> I am not very knowlegable in the mortgage game, but it is my understanding that if I was to seek a fixed rate at this time it would obviously be higher. However, I would be safe if the rate went higher than my fixed rate in the future. The longer I wait the more likely I will be fixed at a higher rate if interest rates continue to rise.
> 
> Is what I am saying accurate? Should I lock my rate in ASAP? Should I wait until the end of my term? Open to any advice on the issue. Also we are keeping an eye out for another house anyways, but dont expect we will be buying anytime soon unless its exactly what we want at an amazing price.


Are you sure your mortgage is open?

Whether to lock in or not will be based on your risk tolerance. If I was in your shoes I wouldn't change a thing, but I would ensure I was making payments like my rate was 5%.


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## Brian123 (Sep 4, 2010)

Shayne said:


> Are you sure your mortgage is open?


Yes it is open, I just checked. Suppose this is unusual for a 5 year term isnt it. I just did a quick look at closed vs open mortgages and it seems open terms are usually only for 6 months to 1 year. 

I am currently not making payments as if my rate was 5% because I have other higher priority/interest debt. I am taking advantage of the current low rate to pay more on the other debt.


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## Jungle (Feb 17, 2010)

Brian123, I would keep your mortgage rate the same. 

www.canadianmortgagetrends.com is an excellent site what's on the market, rate forecasts, etc.


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## kcowan (Jul 1, 2010)

You can only lock in a 5-year term so the question becomes: How long will I save money versus what is the risk of a rate increase. I think the answer right now is that open wins.


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## Shayne (Apr 3, 2009)

If it is open, he is free to do whatever he wants for any term.

That rate is hard to beat as well. Me, I would stay put.


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## dilbert789 (Apr 20, 2010)

Here's an article from MDJ that discusses exactly this. 

http://www.milliondollarjourney.com/avoid-the-5-year-fixed-mortgage-trap.htm


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## Riff Raff (Sep 5, 2010)

dilbert789 said:


> Here's an article from MDJ that discusses exactly this.
> 
> http://www.milliondollarjourney.com/avoid-the-5-year-fixed-mortgage-trap.htm


While I won't/don't dispute Ed's findings, I think the rates available today will be pretty darn close to what 5 yr var will yield.

It comes down to risk tolerance.


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## Jungle (Feb 17, 2010)

Yes Ed Rampel says 1 year fixed or variable with good discount. They say the same on CDN mortgage trends.. with graphs to back it up. 

At one point in the last month, there was a chance you could lock in with a BMO's 3.59% 5 year fixed. Depending on the rate hikes in the next five years, this is not a bad rate.. It's more so just good timing..

Personally I would wait for the prime -1% discounts coming. Prime -.85% is here already.


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