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Fix vs. Variable depends on a few things.
The largest factor affecting this decision is which direction you feel mortgage rates are going to go and for how long.
For example, if you feel that mortgage rates are going to increase over the number of years then a fixed rate may be better than a variable rate.
Conversely, if you feel that mortgage rates will drop over the next number of years then a variable rate may be better than a fixed rate.
In these scenarios the rates that are available to you may look like the following:
Variable: 3.5%
5yr Fixed: 5%
So if rates are going to go up over the next five years the variable rate may at some point be higher than the fixed rate that you could have signed up for.
The variable rate may allow you (depending on the institution) to lock in at a fixed rate at any time but if a year has passed and the variable rate that you are currently at is 4.5% and you want to lock in before it goes higher the orignal 5yr 5% won't be available anymore. The new 5yr rate will be something like 6%.
In the reverse situation, where you think the rates are going to go down. After a year if you choose the variable rate you may be paying 3% whereas if you chose the fixed you will still be at 5%.
I hope that I am helping.
With the home inspection and legal/notarial fees, I was not suggesting that the bank include them in the mortgage. I was suggesting that the mortgage broker get the bank to pay them for you.
If I remeber corectly I did not pay for either of those fees.
These fees can easily add up to another $2000.
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Sticky The Stickman
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