I.D.E.A.S. For Choosing Between A Fixed And Variable Rate

General Denise Dunkley 25 Feb


Best-Mortgage-termsThe first question people often ask when deciding between a fixed and variable mortgage is: “Where do you see rates going?”  

They assume we as mortgage planners know…and of course we don’t.  No one does. 

We can, and do, present a variety of possible rate scenarios based on:

  • where we are in the rate cycle
  • how rates have performed after past recessions
  • and other available research.

But you never know for sure where the rate setters (theBank of Canada and bond traders) will take the market.

Aside from reading the tea leaves on rates, the best thing a borrower can do is measure his/her ability to handle rising payments. To gauge that, we use a handy acronym called IDEAS.

IDEAS stands for Income, Debt, Equity, Assets,Sensitivity to Risk.


General Denise Dunkley 9 Feb

The world economic news today has the Greek bailout plan not defaulting anymore, the British government injecting close to $80 billion into their economy and the US unemployment claims down from their forecast.

All of this news suggests a stronger world economy but it could also mean that mortgage rates may be on the rise as investors seek more aggressive investments instead of bonds.