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Need advice on locking Mortgage rates

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Money Talk > Real Estate

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adamjohnson
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Need advice on locking Mortgage rates  Reply with quote  

Hi,
We will be locking in the mortgage rate with a credit union lender who has some of the lowest rates as of today. We are taking a 30 year Amortization period and given 2 options;

1. Fixed at 2.49 for 5 years (Strict penalties for breaking it)
2. Variable at Prime - 0.40: 2.70 - 0.40 = 2.30 as of this minute and flexible to convert to fixed rate at any time with $0 cost. If we break Variable mortgage to jump to another lender then we have to pay maximum 3 months of penalties.

I know US banks and some Big 5 Canadian banks are jacking up the rates as I am writing this post. Can someone throw light on what we are seeing now and how canadian fed rates will play considering;
1. Canadian fed rates whether it goes up or down or stay flat will hurt or help us
2. Canadian debt to equity ratio continues and housing balloon gets bigger and bigger
3. Trump in south and depressing Oil rates and
4. Canadian fed government borrowing and happy to borrow and spend at rock bottom rates (i am guessing they are borrowing from BOC or World bank I don't know where they are borrowing it from)
5. In the next election considering the worse case if the current party of Liberals are kicked out and Conservatives come back?

We are deciding whether to lock at fixed or variable on considering all the above factors

We don't have any debt or major expenses but considering to purchase a family car on debt at loan of 35K once the housing loan is financed

Any views appreciated.

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Post Sat Nov 19, 2016 8:00 am
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