If you are thinking of locking in your variable mortgage rate…

Numerous calls have come where clients are wondering if they should lock into a fixed rate from their existing variable rate mortgage. Lots of callers have asked if now is a good time to make a purchase or to move up. And still others have wondered what effect any government actions will have on the housing market.

Many of our clients are in variable (adjustable) rate mortgages that are well below prime. For those clients we would not recommend locking into a fixed rate (currently at about 3.79%) unless your term is coming due within the year and you really want to lock in your rate. Your payment will rise substantially because the spread between your current rate and the fixed is over 2% extra interest.

If you stay in your current mortgage for another year, you may well have very good rate options down the road that are about as good as they are now and you will continue to save for the rest of your term.

If you are thinking of moving up or purchasing a rental property, most prices in Alberta are still lower than they were a year or two ago and with interest rates between 1.95% variable (not a typo) and 3.69% fixed, affordability is still very good. We purchased 2 rental properties this past summer and the rents more than cover the mortgage payment.