Mortgage Rates
Rates and points are subject to change without notice.
Discount rates are on approved credit and subject to lenders’ discretion.
Certain conditions apply.
Variable Mortgage Rate
A variable mortgage rate, that is also known as adjustable rate mortgage is a loan where the interest rate is periodically adjusted based on the changing of the prime lending rate. Adjusting the rate secures a constant margin for the lender, who most of the time depends on funding related to prime.
Subsequently, the borrower’s payments may change with the changing interest rate and in essence the term of the loan may change also. The rate could be applied directly ie, prime is 3% so the borrower’s rate is 3% or another way to apply the rate is on a rate plus margin basis, ie. prime+1, when prime is 3% so your rate is 4%.
Ultimately, the decision is yours. If you opt for a variable mortgage rate you may save money but you might be stressed out by the risk and fluctuation you are taking.
Fixed Rate
A fixed rate mortgage is a mortgage where the interest rate remains the same through the term of the loan, as opposed to loans where the interest rate may adjust or “float.” The payment amount is independent of the additional costs on a home, which include but are not limited to, property taxes and property insurance. Consequently, payments made by the borrower may change over time with the changing amounts of taxes or insurance, but the payments handling the principal and interest on the loan will remain the same.
Fixed rate mortgages are characterized by their interest rate (including compounding frequency, amount of loan, and term of the mortgage). With these three values, the calculation of the monthly payment can then be done.
For first time buyers or those who prefer to know exactly what their payment is for budgeting, this is the best way to go.
Commercial and construction loans also available!