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What Is The Best Mortgage Rate?


When people ask ‘what is the best mortgage rate’, they are quite often looking for the answer ‘the lowest mortgage rate’. This may be true for one type of rate, for example fixed or variable, but how will someone know which type of rate best suits their lifestyle? Like any choice in life, each has their own pros and cons, and the decision made should be based on suitability, possible change of events or comfort level. The best mortgage rate is dependent not only on the interest rate itself, but the terms, conditions and flexibility as well. So perhaps, people should really be asking, what is the best mortgage for me?

Let’s take for example the current rates. 2.99% for the 5 year fixed, and 2.5% for the 5 year variable. Sure, right from the start 2.5% is much lower than the fixed rate, but is a variable rate right for you? If prime rates increase, will you be able to afford the difference? Is your current employment situation strong enough to afford fluctuations in monthly payments? Are you the type of person that needs to have consistency? If your answer to these questions is no, then variable isn’t the ‘best mortgage rate’ for you is it? See, everyone has their version of ‘the best mortgage rate’.

Now on the other side, let’s take a look at fixed rates. Are you more risk adverse than others? Are you willing to take the chance of sticking with a variable that has the possibilities to gain even greater and pay more principal over the term? Does your current job situation allow for changes in finances given that rate go up in the future? Are you ok with changes or do you not need consistency to stay on top on things? If your answers to these questions are yes, then the best mortgage rate for you in a variable rate.

This example was simplified to give you a quicker understanding of what the ‘best mortgage rate’ actually means. Like buying a house and choosing your preferences for decor, choosing the right mortgage is a personal lifestyle choice. There are many more things to consider when choosing your mortgage such as prepayment privileges, penalties, security and much more. It is important to go over these factors with your broker to be well aware of what you can and can’t take advantage of. At Canadian Mortgage Services, this is the length we go to provide our clients with a clear and concise understanding of what they are agreeing to. We cater to their needs by matching their lifestyle to a mortgage product that allows them advantages and flexibility. It’s more complicated and stringent than it sounds! Always remember, the lowest mortgage rate isn’t the best mortgage rate unless you can determine that it is the best suited for your lifestyle and any changes that may take place throughout the term.

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