Canada Mortgage Quotes

"Hello Tommy. We want you to know that we are very pleased with the quality of service your company provides. We sincerely appreciate your responsiveness and the way you conduct business. We have recommended your company to others because of our satisfaction with your service. We look forward to doing business with you for years to come. From the bottom of our heart ,Tom and Oudom Vongphakdy ,we again appreciate you caring and pull us out from drowning in heavy debt. Thank you Best Regards "

Tom & Oudom Vongphakdy
15 May. 2009

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Variable Rate Mortgages

Will I save money with a variable rate mortgage? Moshe Milevsky, a professor at York University in Toronto, wrote a paper in 2001 which demonstrated that during the period from 1950 to 2000, consumers benefitted by choosing a short term or floating rate mortgage versus the traditional 5 year mortgage 89% of the time. Put another way, choosing a 5 year fixed rate mortgage over the past 50 years has been like betting on a horse that loses 9 times out of ten. Milevsky updated his paper in 2007, and the same 89% ratio held true - in fact, it came closer to 90%). Now it might be fun to bet $20 on a long shot, but would you bet $150,000? $250,000? Yet that is what consumers do when they opt for the traditional 5 year fixed rate mortgage. So why do we choose this product? Because that is what is being sold when we go to the bank. The banks benefit from your choice of a five year term mortgage in many ways. By locking you in for 5 years, they have the time to develop a relationship with you - and there is nothing wrong with that. But the fact is, most Canadians - 70% in fact - will break their mortgage before this term is up. So the banks are selling a product ill-matched to the needs of the majority of its consumers. This mis-matching of the banks' product and consumer needs often results in clients paying hefty penalties to break their mortgages. But it does guarantee the bank many years worth of income whether that comes from straight interest or the penalty paid to get out of your mortgage before the end of the term. So, choosing a variable mortgage can have the following benefits: - Historically, it has been the way to pay the least amount of interest - By paying less interest, you can pay your mortgage off sooner - Penalties on Variable mortgages are typically lower than those in fixed mortgages. - The ability to lock-in if you wish - Lower payments increase your monthly cash flow

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