The results of this survey, shows that: More than 1 in 3 Canadian homeowners aged 30-39 are unaware interest rates are near historic lows.
In reading this quote by the President of Manulife (ticker symbol MFC), many young Canadians are not on top of their finances.
[quote]“It’s concerning that many younger homeowners believe today’s interest rates are normal when, in fact, they are at near historic lows,” said Doug Conick, President and CEO of Manulife Bank of Canada. “These younger homeowners may be taking on more debt than they will be able to afford if interest rates rise. While there is no expectation we’ll see rates like those of the 1980s, a rise of even a few percentage points could have a significant financial impact on this younger generation of Canadians.” [/quote]
When I received my first mortgage (five years ago), interest rates were a major obstacle in choosing my first condo. Real estate is expensive in Victoria with a single income.
I bought not what a mortgage broker or online calculator told me but what my budget and bank account told me.
Sometimes you need to take the advise of your banker/mortgage broker but also budget or do a what-if scenario with them.
[box type=”tick”]Ask them this question, “What if the interest rates go up 2-3%? What will my payments be?”[/box]
If that number is affordable, stick with the variable rate mortgage over the fixed rate mortgage.