Join Date: Apr 2011
Location: central Alberta
Mentioned: 0 Post(s)
Quoted: 293 Post(s)
Just had a similar conversation with the bank yesterday. 1, 2,3,4, and 5 year fixed were all 3.49, whereas floating is 3.95. At this point, while I acknowledge that the potential magnitude of the upside is many multiples of the down side, I still think it is more likely to go down than up within the 5 years. Was tempted to just lock it in for a year at a time and wait for a better opportunity, but in the end took the 5 year. Have other mortgages needing renewed in the interim, so if rates, drop, can always average down.
Just the fact that there is no( or little) premium on the longer term fixed rates, and that they are less than prime or floating, should tell us all we need to know about how comfortable the market is with long term rates not going up. And I have never yet met a banker who thinks rates are going down and recommended floating.
How viable is splitting up the mortgage into 2 or 3 different terms as suggested? I actually asked the very same thing yesterday, but it would require a separate mortgage for each term, including the application fee, and registering each with land titles, which adds up.
Had one locked in at 2.64 until recently, so 3.49 is a substantial difference, even if it is still a very good rate historically.
Justin Trudeau, accomplishing miracles since 2015, making Pierre Elliot look smart, competent and western friendly.