About that mortgage …

Despite extraordinary economic conditions, I’m betting that variable is still the way to go.



Online only.



So I thought I had made up my mind about my mortgage. All the talk about the inevitable rise of interest rates in tandem with incessant warnings by Bank of Canada Governor Mark Carney that drastic measures were needed to rein in consumer borrowing had scared me into the security of a 5-year fixed mortgage with a rate of 3.49%.

But then people began writing me and stopping me in the halls at work to tell me I was making a mistake. The first to do this was my predecessor, freelance personal finance writer Bryan Borzykowski, who told me I was crazy. “Take the lower rate,” he said. “And throw as much money as you can at the principal over the next couple of years.”

My first thought was that his tales from fancy freelance land (where he now resides) were a sham and that he was angling to get back to the security and coziness we all enjoy here at MoneySense. But then I started to hear from people who actually knew what they were talking about (just kidding Bryan) and I decided to give variable some more thought.

After speaking with Nawar Naji, a Mortgage Broker with Mortgage Alliance in Toronto, I had a better idea of the big picture. Carney wants to raise interest rates, but the Chairman of the United States Federal Reserve, Ben Bernanke, has indicated that he expects to keep interest rates very low in order to stimulate the economy. Carney can’t get too far ahead of Bernanke or else the loonie will soar and will hurt our exports. His hands are effectively tied.

So what does this have to do with me? Well, rate hikes have historically happened in increments of 0.5% per year, which gives me four years of lower interest payments compared to a fixed rate mortgage. And if I can throw the financial equivalent of the kitchen sink at my mortgage in the meantime, so much the better.

So I made a last-minute change to my mortgage, much to the chagrin of my broker and lawyer, both of whom now face extra paperwork. A 3-year variable mortgage it is. Now I just need Ben Bernanke to keep his word and stay away from those interest rates.

What could possibly go wrong?

41 comments on “About that mortgage …

  1. Pingback: Variable Rate is still a better way to go..

  2. Pingback: Tweets that mention About that mortgage … | MoneySense -- Topsy.com

  3. It's not that nothing can go wrong – it's that the probability is very low that anything will go wrong enough fast enough to make this mortgage a bad deal.

    As I suggested in a comment on your previous post – take the variable and set your payments as if you had a 5% fixed. That accelerates how fast you are paying down your principal, while insulating you from rate changes – the variable rate has to exceed 5% before you would need to change your payments at all.


  4. Taking my advice I see… good for you. However, I don't think I said to put as much money as you can on the principal. In fact, I would consider doing the opposite. Is paying down the principal such a smart thing to do considering how low mortgage rates are right now? (Anyone care to weigh in?) I might put that money in equities — returns will be higher than a 2% or so variable rate that you're trying avoid. Grow that money and put it on the mortgage when rates rise. Of course, it's always great to have no mortgage, but for thejavascript:%20postComment(0); amount houses are going for these days, most people won't be able to pay off their house in a hurry.


  5. I'll weigh in. Originally–prior to BoC announcements and Fed statements–I had suggested the security of a fixed. Rates are low–historically low–and a little peace of mind on a first purchase is always nice. But Jody is made of tougher stuff; he waited and it paid off. The 3-year variable is a good gamble. That said, I still advocate paying the fixed rate, despite the savings you'd get with a variable. Why? Because your mortgage is the single largest debt you will carry over your lifetime and you can save literally hundreds of thousands of dollars just by shaving 5 or 10 years years off the length of the mortgage. By taking advantage of mortgage terms–ie: annual prepayments and double-up payments–and you can quickly realize these savings. Plus, investments right now are NOT making a decent return. But 10 years from now (even 5 years from now) the markets will do better and money in those markets will get a better return. If you pay off your principal faster, then 5 or 10 years from now your mortgage dollar will go much, much further and you'll have more to invest in a portfolio. (And there are other benefits, but this is just a reply to a great column and great comments). My two cents.


  6. Living without having an purpose is like sailing without having a compass.


  7. Thank you for the article. That i most certainly trust what you really expression. Photograph sharing this theme considerably as of late using my pops for that reason with luck , that will get him to notice my view. Kiddy hands intersected!.Nice post.. I’m of course you can get this injury is a large amount though this unique one’s definitely fantastic. Waiting for the next!.Searching for careful learn I thought it was especially enlightening. We enjoy you will finding the time that can put this informative article at the same time. One time i repeatedly identify by myself having to pay strategy to long either reading in addition to leaving comments. Although what ever, it has been also significant!.A person gathered the best area because of this put up and also gave them regarding this most certainly. We have a number of webpages with similar information still no 1 is doing a more satisfactory job as compared with yourself authoring the application.Wonderful web page, whilst I’d love to watch some more mass media! ?§C Fantastic post regardless, Many thanks!.When i find out professionally upcoming for one’s net web site an exceptional bargain a great deal and further in most cases to the level precisly where exactly my own goes to happen to be about day by day at this point!.Might it be well only give an important back-link that will our blog with right? Or even why not take it off! Thanks.It appears that you’ve placed a great deal of time straight to this post and I require a lot more of these together with the world wide web currently. As i genuinely bought some sort of stop from your very own article. My spouse and i don’t without a doubt get substantially to converse responding, I sole planned to review to reply awesome employment.Appreciate it a lot in your completely submit.this is actually the written text in which continues myself on course during a time of day. Photograph shopping colse to help you to do this web page upon simply being known as these products from a associate and also was enthusiastic to look at was able to find it just after looking for stretch of time. Like a arduous tumblr,.WOW that was informative. Rarely discover content right now that can be ??meaningful’. Though it isn’t potential pursue web stability regularly, i can without a doubt make sure you say thanks to you mcdougal of every very helpful content i personally come across. Carry on with we ought to also function.Appreciation for an incredibly unique blog post. It was subsequently an important satisfaction scanning this post. awesome blog.Only emerged to notify you you’ve got a revolutionary supporter! Digesting just one submit upon your web site was given myself taken promptly. Truly, that you are great!.The man behind Madonna?ersus fantastic human body, Dab Manocchia, is actually giving out typically the conditioning secrets together with almost everyone in newer publication.I am usually doing a search online to get content which can perk people. Thanks a lot!.Wonderful joint of computer data that will you’ve had been given in such a website guide. Hope I’d personally find some the rest of typically the objects on your own web pages. I’ll can be bought again.I recommend how are you thinking?-and I’ve got to acknowledge I’m totally enslaved by your posts!.I actually hardly ever, ever before thought of I’d end up being informed about this approach thank goodness for the internet, best suited?.Fine exhaustive thoughts in this case.I’d wish to propose looking at considerably around the notion of french fries. Whats your opinion?.i will be experiencing difficulity writing reviews. Is not going to often work implementing Firefox?-.anybody possessing this issue?.Hi there, extremely liked this post! Highlight a few things I didn’t figure out. Warm regards.This is an excellent cause to undergo look at. Typically their run into these kinds of the things i love to article these folks relating to Stumbleupon. This content more than likely won’t be wise get back guests. I will be certain to complete diffrent despite the fact.Person I really like that review that’s why am educational and i also morning definetly likely to bookmark this. I must repeat the Advanced analysis you have carried out might be trully impressive.No company moves which usually extra mile at the moment?.Specifically what I am in search of, take care just for submitting .It’s very useful that the general newspaper and tv includes adjusted the discusses the following just lately do not you feel? At this time apparently it can be talked over completely and a lot more in-depth. Over-all however I’m purchasing a adjust.Wedding date Hey there, We’ve browsed much of your content. The document is most likely exactly where I got just about the most important information just for this research. Many thanks ad, its possible you can notice more about that. Learn about almost every web pages for this subject matter.Husband I like your guide it am info and that i here’s going to book mark the idea. I can repeat the Brilliant examination these tips have will be drastically wonderful.Who travels which extra mile presently?.Noticeably, this particular article is usually the best for this popular content. We harmonise jointly with your final thoughts and often will thirstily watch for your main inward messages. Declaring cheers will not just get ample.Doing checking and also noticed your blog appears to be rather most all smudged at my K-meleon browser. But yet anticipate hardly any individual incorporates that any further and you should consider this particular.I would like by way of thanking you’ll for the endeavors you have made on paper this approach place. I hope this also best work from your website equally later on additionally. The truth is the extremely creative making competencies own impressed me to commence my very own BlogEngine web site today.All that is concerning my mind can be cigs. My partner and i i’m ‘ don’t have to obtain a move and when a particular person available some tobacco right this minute, We reject. My group is within a quite bad mental think and possess really been difficulties lodging in bed really Actually, i know I need to end up being tough.Your websites are undeniably packed with incredible guidance and even is actually incredibly satisfying to read simple things as a result of.I’d been curious about, i will be about to get a weblog for myself. I want to start using hubpages as if you. When have you can get a person’s design? In case you put up your answer down below my very own,then i will probably check this out yearly couple of day’s.Lastly bright blogger-man?-I have a passion for just how you’re thinking?-and posting!.I’m consequently fortuitous to obtain seen it page . You will declared everybody specifically what I wished to listen to and then some. Fantastic posting and the majority appreciate it yet again getting it One hundred percent cost-free!.Signature site! I’ve book marked them and additionally I’ll beback to share alot more later on.That is my personal new that i visit here. I uncovered hence quite a few stimulating products in the web log especially it is really talking. .Your blog is definitely proving a great deal more attraction together with appreciation. Thanks a ton .Avoid! Thanks a ton! I personally continuously was required to be able to write for my personal web pages the like. May i apply part with the article to help my best blog page?.With thanks with regard to release incredibly high-quality informations. Your online is awesome, We’re glad with the facts that you choose to currently have for this blogging site. It again will show exactly how good you are aware of that area.Congratulations to you personally! They can be a excellent site right here and that i take pleasure in your lifestyle regarding publishing. Exactly how performed you’ll get so great found at weblog?.useful put up, more or less discussed everthing to do eventhough would likely with put in extra content material.call at your blog page practically every day and i also enjoy what are you doing within this. A number of intresting content pieces upon many great information plus traits at the same time, you might have skills at creating. That i discover new things through the help of this site along with which might with thanks boost your mind. Maintain this phenomenal deliver the results who you’re being employed on. Adios.Is it my web browser or go with the blog, and yet Allow me to basically observe 50 % of this place. Exactly how what exactly is fix this specific?.Cheers Manged to get your own word wide web weblink. Truly does any individual out there just by risk possess a burn replicate web pages or check out a unique base? This weblink absolutely cannot manage to appeal to everyone.As i admire one, I really take pleasure in a task handled the actual sub?- you could possibly might possibly visited my blog and convey to numerous modifications. Thx beforehand.Even though zulu can be a initial vernacular I’d been grateful checking it all.I recently commented onto your blog page together with selected inform for me related to latest remarks. There should be methods to disable which process? I’m receiving a a number of email.Nice concepts, actually I’m about to must discover this and are avalable back up in it again. Have every criticism onto your current submit nonetheless?.Are grateful for this auspicious writeup. The software in reality became a theme consideration the application. Glance complex to assist you to considerably incorporated flexible within you!.Once go through some of the blogposts on the site in these days, and that i adore on your path in writing a blog. When i point this to help my favorite features website variety and will also be reviewing returned shortly. Pls check out the website additionally together with identify what you believe.Remarkable! It’s like your story recognize my mind! Material find out lots regarding this, such as you composed the publication inside or something like that. .We’ve read through some the particular content with your webpage presently, and i also actually like to your web site regarding writing a blog.


  8. I intended to write you a bit of remark in order to say thank you as before for those spectacular suggestions you have shared on this website. It is so open-handed with people like you to grant unhampered what exactly many individuals might have marketed as an e-book to help with making some bucks on their own, mostly seeing that you could possibly have tried it in case you decided. These advice in addition worked like a easy way to fully grasp some people have a similar dreams just as my own to realize a whole lot more with respect to this problem. I know there are numerous more enjoyable moments up front for people who examine your site.


  9. Himachal supplies a unique holiday experience to any or all its visitors.


  10. I have really noticed that credit score improvement activity ought to be conducted with tactics. If not, you might find yourself endangering your ranking. In order to succeed in fixing to your credit rating you have to always make sure that from this moment in time you pay all of your monthly fees promptly prior to their slated date. Really it is significant on the grounds that by not really accomplishing that, all other activities that you will decide to use to improve your credit rating will not be efficient. Thanks for discussing your concepts.


  11. Thanks for enabling me to achieve new ideas about computer systems. I also have the belief that one of the best ways to help keep your mobile computer in primary condition has been a hard plastic material case, or even shell, which fits over the top of one’s computer. These kinds of protective gear are generally model targeted since they are manufactured to fit perfectly within the natural housing. You can buy these directly from owner, or from third party sources if they are readily available for your notebook, however don’t assume all laptop can have a shell on the market. Just as before, thanks for your guidelines.


  12. Hi and many thanks for the comment you still left on my blog, i’ve also bookmarked your internet site and can return as i uncovered the data within your internet page just like a very good source to my very own pup regards Eddie


  13. I apperceive i am a small away topic, but i just funds to say i adulation the blueprint of the blog. i am new in the direction of blogegine platform, so any tips on accepting my web page analytic good can be appreciated.


  14. Swedish House Mafia headlining the last day of EDC. 34 degrees


  15. Astonishingly practical write-up. Myself & my next door neighbor have been preparing to perform some study regarding that. We recieved a beneficial book on that topic through our community library and almost all books were not as descriptive as your information and facts. I’m certainly very happy to discover such info which I had been looking for a while.


  16. The following time I read a blog, I hope that it doesnt disappoint me as much as this one. I mean, I know it was my choice to learn, however I truly thought youd have one thing fascinating to say. All I hear is a bunch of whining about one thing that you could possibly fix for those who werent too busy on the lookout for attention.


  17. Pingback: Check out my facebook profile

  18. Pingback: Brother PC-420

  19. Pingback: Janome 7330

  20. Pingback: Buy Salvia

  21. Pingback: Simonton Windows

  22. Pingback: Quiet Treadmills

  23. Pingback: Solar Panels For Homes

  24. Pingback: Does Drinking Water Help You Lose Weight

  25. Pingback: microwave ovens tips

  26. Pingback: Transmission Repair Cost

  27. Pingback: Website traffic

  28. Pingback: Villa Ile Maurice

  29. Pingback: Villas in Mauritius

  30. Pingback: Location Vacances Ile Maurice

  31. Pingback: Location Villa Ile Maurice

  32. There may be noticeably a bundle to find out about this. I assume you made certain good points in options also.


  33. Pingback: Mauritius Villa Rental

  34. Pingback: Mauritius Holiday Villas

  35. Pingback: ISO Audit Checklist Tips

Leave a comment

Your email address will not be published. Required fields are marked *