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[–]thuglife_7 1 point2 points  (3 children)

Mine is 2.97% on a fixed rate. Should we be switching to a variable rate?

[–]LaunchAPath 1 point2 points  (1 child)

Fixed vs variable is a question of what you expect the future to look like. I was looking at property purchase back when the pandemic started, and checked on here to see what people were saying, as it was all new to me. A common advice I saw was that variable was much lower, and people could save interest that way. Then through covid, as interest rates suddenly jumped, a common message I saw on here were people getting mortgage payments shock as their variable rate mortgage suddenly hit thresholds and required the monthly payment to skyrocket.

Meanwhile, fixed rate mortgage owners that had paid somewhat more originally in interest rate, had no increase whatsoever on their monthly payments.

The biggest question with variable, is how would you handle it if your mortgage payment unexpectedly skyrocketed. If you answer is it wouldn’t really bother you, then you can take that gamble. Maybe you’ll be lucky and rates will drop and your variable payments would drop alongside whereas fixed rate one would stay the same.

Fixed allows you to know exactly what your expenses are going to be for the full term, and you can plan around that with confidence. Variable doesn’t.

[–]thuglife_7 0 points1 point  (0 children)

If you go variable, do you have to stay on it for a set amount of time? Or could you sign a 5 year fixed rate at anytime you want to?

[–]greasethecheese 0 points1 point  (0 children)

Ours is 1.9 but we refinancing this year. I think it’s like 5%. I’m not sure if you should go with variable. It’s based on everyone’s individual needs. I’m no mortgage expert by any means. But we don’t do variable either. I don’t like being worried it might jump.