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Fixed or Variable ? That is the Question

General Duncan Wilson 27 Nov

Fixed or Variable that is the question?

I have found that people have always asked this question when applying for a mortgage. Whether it be your first time buying, refinancing to pay off debts (Check out, or refinancing to buy an investment property.

Being that buying a house is the biggest decision that will impact your financial situation for the foreseeable future; you need to be sure what type of payment you can handle. A 5 Year Fixed rate can be looked at as the same payment for five years. However, the real impact is based on the number of  years you choose to pay the term over. Perform a budget and see how much ($) in comparison to how long your amortization amortization.

This comparison will really show you how much money can be saved when applied to your mortgage payment.   It’s a simple calculation check out  ( ). The rates on this mortgage appear to the left of the page. Or you can call your Windsor Mortgage Agent for a quote.  Currently the rates are very low as well, probably the lowest they have been in a while.

Now let’s discuss the variable rate mortgage. This mortgage usually carries a lower payment due to the low rate. This type of mortgage rate is usually based on the Prime rate, and is quoted as prime “minus” a certain percentage or “bps”. When the rate is for example prime minus 70 bps. This means your rate would be 2.3%. This rate fluctuates based on the Prime rate (the rate set by the bank of Canada). If it goes up your payment goes up. How much you may ask?

Mortgage Amount

Interest Rate



interest Rate Prime minus 60 bps




Interest Rate jumps 25 bps






Here is an example.





As you can see – there isn’t that much of an increase in the payment on $200,000. But you need to prepare for this. The main idea is to capitalize on your prepayments as you pay down the mortgage. I think if your income is unpredictable then I suggest the low payments of this mortgage type, and pay down with extra money on the principal. To see the full effect of prepayments check out ( ) and see what extra payments can do.

When questioning what product you should choose to save you money, always ask your Windsor Mortgage Agent. It’s the best thing you can do. They can guide you through the process and really look at some alternatives. Remember Windsor Mortgage Professional’s jobs are to get you the best rate and mortgage product by comparing all the offerings from the Banks, Credit Unions and Trust Companies.


Your Fearless Windsor Mortgage Agent

Duncan Wilson

For Mortgage Information Call 5199822505

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