The Return of the Assumable Mortgage
It sounds far-fetched but imagine a scenario where you sign a 10-year fixed rate mortgage at 3.89% and five years from now rates have climbed to 6% and variable rates are not much lower.
Homeowners looking to renew their mortgages are faced with a number of choices. Fixed or variable rate? Five or ten year term? Will your current property still be your primary residence in five years? If not, is your mortgage portable or assumable? When making these important choices it is important to consult a Professional Mortgage Broker to assist you in keeping informed of all of the terms of your mortgage.
Currently, mortgage rates are historically low, and talk of rising rates is prominent. Locking your mortgage in today for ten years at a fixed rate could be an incredible asset if rates are higher when you're looking to sell and still have a few years left in the term.
Another option to look into is the portability of your mortgage. If you are in the same aforementioned scenario and wish to keep that mortgage rate, it is essential to ensure your mortgage is portable to another property. There are normally fees associated with transferring your mortgage to a new home, however these are nominal when compared with the thousands in interest you stand to save.
To learn more about turning your mortgage into an asset, it is recommended to enlist the assistance of a Mortgage Broker.
To read the full article from the Financial Post, click here.