[rcourtna]

In the past I've read that, on average, variable rate mortgages end up being more attractive than fixed rate mortgages. This prompted me to switch my fixed mortgage to a variable one. This was before the financial crisis.

Looking back, I made the right decision at the time. My mortgage rate kept sliding and today it is at 1.5%. My secured line of credit is at 2.25%.

Now I have to make another decision. I'm going to run up my line of credit to $80K for home renovations. I'll then get a mortgage to pay it off.

Now the impossible question. Assuming that rates are at an all-time low today, should I negotiate a fixed mortgage, or another variable one? What would you do?

 

[osc]

Variable. The best rate right now is Prime - 0.25% (2.00%). If you wait a few months you'll most likely get lower than that (probably Prime - 0.50%).

 

[firsttimehomebuyertips]

rcourtna,

Your line of credit is at 2.25% so why not keep the eventual $80K at that rate?
That way you can have a low variable rate and be able to pay off as much as you like. Without having to pay penalties.

 

[Berubeland]

Can't you get variable rate and lock it in anytime? I think you have that option with variable rate mortgages.

 

[Jon202]

Can't you get variable rate and lock it in anytime? I think you have that option with variable rate mortgages.

No, that would be an open VRM, whereas most are closed VRM's for 5 years.

 

[Gregreid]

Can I ask who you have your prime + 0 % HELOC with? I thought TD was the last to increase their credit lines to prime +1% effective November.

 

[Shayne]

Can't you get variable rate and lock it in anytime? I think you have that option with variable rate mortgages.

Yes you can.

 

[canadianbanks]

You are not asking the right question . The right question should be - Would you be able to afford your debt if/when interest rates go back to 6-7%?