Anyone with a long enough memory can remember the last days of the 1980’s, when mortgage interest rates were insanely high. Folks have told me that they were paying 18 or 19 percent interest on their homes.
Here we are some 30 years later, and obviously the entire landscape has changed. Not just in Canada, but the entire world.
Now, more than ever, we feel the effects of what happens on the other side of the planet. Communication and industry have become global in a way that most couldn’t have even imagined back in the 80’s.
It’s never been a better time for investors and homeowners alike to borrow money.
The real question is, should you lock in at today’s rates, or go for the marginally cheaper variable rate mortgage?
As always, my answer to that “depends”.
There’s always variables for everyone’s personal situation, and here’s a general rule that I go by…
……. If you need predictability in your monthly payments, then choose the fixed rate.
Especially right now, it’s unlikely that we’re ever going to see interest rates this low again in our life times, however…..there’s exceptions to every rule.
I know that I hedge a lot on some of the things that I say when it comes to mortgages, but that’s because it really is a personal thing. A mortgage, like fine clothing, really needs to be tailored to the individual.
The real difference is, you can tell when someone is wearing a “one size fits all” suit off the rack, but it’s not so easy to spot when it comes to a mortgage.
Today in the “Investment Property Income” podcast, we’re talking about variable vs. fixed rate mortgages, and how the interest rates actually get set by the Bank of Canada.
This is a pretty interesting one.
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