Fixed vs Variable mortgages
D eciding on a mortgage rate option often becomes much more complicated and thought provoking than initially anticipated. Especially if this is the first time you've been faced with this decision. You have to decide between a fixed rate term or a variable rate term and anything from a 6 month agreement to a 10 year agreement. In some cases you might even have the option to choose an open term mortgage (no pre-payment penalties) however, don't expect an open term mortgage to be available and if it is, the rate will be much higher (usually at least double). Fixed Rate Terms... Understanding a fixed term mortgage is pretty easy. You decide on the length of the term you want and you know exactly what your interest rate and payment will be for that time. Variable rate mortgages come with the uncertainty of knowing what your interest rate and payment will be, which is why this post primarily focuses on explaining variable rate mortgage agreements. Variable Rate Terms...