Your Mortgage – Variable or Fixed?

When you are refinancing or purchasing a home you will be asked a seemingly simple or complex question. Variable or Fixed? I have had many clients ask which is best.

You need to understand what they both mean and also need to know where you are most comfortable with. Personally, I am a variable girl all the way. I prefer to lock in my payments at a higher fixed rate but play the variable. That way I am always paying more of the principle down and am comfortable at a higher payment level when  the rates go up.

Long-term mortgage rates are following the bond market.
Short term variables are tied to the prime rate.
When the prime rate went up by .5% your mortgage payment increased by $45 per $100,000.

If prime gets to 3.25% and your mortgage is at prime +1 you will be paying more than 4% and currently you can lock into a fixed for 3.79%.

View Dori’s Real Estate Listings