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

Denise Dunkley, DLC Forest City Funding 10671

Mortgage Agent Level 1

Originator Licence #FSRA - M08007306

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The 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 […]

The 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.