What do you want of Mortgage Interest Rates Today ?.
Not much has changed in this moot over the last few years. There is still not one, specific talk that works in every situation and fits everyone's personal financial picture.
What we know today is that monthly payment on Fixed Rate Mortgage (Frm) will be significantly higher than changeable Rate Mortgage (Vrm). That is today.
Mortgage Interest Rates Today
Many wonder if with the raising interest rates that will still be the case couple of years from now. No one knows for sure.
I will list few of the prominent angles I think and at the end will disclose a very attractive statistic that may very well help you put some perspective and make you more comfortable with your decision. This limited known fact may surprise you as you don't find it categorically anywhere.
If this dilemma was to be decided squarely on numbers, the decision may categorically be fairly easy. However, when you throw in the "unknown factors", personal aspects as risk tolerance and quality to mitigate risk the decision becomes harder. It is no longer based on numbers alone, but emotions start to play a big part. Many good mortgage brokers will tell you that "there is not right or wrong choice".
When choosing on my personal abode mortgage I look for few factors:
Job stability - how stable is my job, is my revenue likely to go up or stay the same Am I Ok with paying more and having the peace of mind or paying less and dealing with the possible payments going up over time.
If I am choosing on a mortgage for an revenue property, then it's all about cash-flow. Cash flow is what's left in my pocket after all expenses are paid from the rents collected.
Less interest payments equals more cash-flow at the end of the month Make sure the cash-flow can reserve growth of interest rates all the time stress test the property, assuming much higher rates, to make sure that the investment will accomplish in the time to come with higher interest rates, i.e - will this investments still make sense and make money if interest rate go up to 6%?
For now and the foreseeable time to come all my mortgages are variable.
Keep in mind that because how mortgage legal documents are written there may be a huge inequity in penalties when trying to get out of fixed vs. Variable, with variable's penalty limited only to 3 months of interest and nothing more. So in the time to come if you rule to switch to fixed, it may not be very high-priced to do so.
And here's the statistic that I mentioned at the beginning.
From 1950 up until now changeable rate beats fixed rate 88% of the time. I am perfectly Ok with the odds. You'll have to rule for yourself.
How to settle - changeable Vs Fixed Rate Mortgage
0 comments:
Post a Comment