What Is a Variable Rate Mortgage?
The process of buying a house can be long and complicated, with many different choices to make. One of the most significant is deciding what type of mortgage you’re going to need based on your specific situation. While you won’t need to make the final choice until after you have found a home, it’s a good idea to start evaluating your choices early on.
There are two main types of mortgages to consider: fixed-rate mortgages and variable-rate mortgages, also known as floating. A fixed-rate mortgage provides the borrower with an interest rate that remains constant throughout the entire lifetime of the term. A variable-rate mortgage implies fluctuating interest, which means that your mortgage payments will also fluctuate.
With a variable-rate mortgage, the interest rate attached to the loan is subject to change as the economy and housing market changes. Each month, a set amount will be paid toward the mortgage principal, but the amount applied to the interest may fluctuate. There are a number of reasons why choosing a variable interest rate may be a good choice. They’re typically easier to qualify for than fixed-rate mortgages and, for many, choosing this type of mortgage is a necessity in order to qualify for the home they want to purchase.
Variable or floating mortgages also commonly provide buyers with a lower initial interest rate. In some cases, these rates are locked in for the first year of the mortgage and then subject to change thereafter. It’s important to understand that the interest rate of a variable-rate mortgage can change dramatically and quickly. Often, borrowers who choose a variable rate are caught off-guard when their mortgage payment drastically increases. Professionals have started calling this “payment shock” and, for some people, it can become difficult to make their monthly payment.
If you choose a variable rate, you must be prepared for the possibility of a rise in your monthly payment. If you set aside money to allow for monthly increases, you’ll be fine. Talk to a mortgage broker to discuss which type of mortgage rate is best suited for your specific situation.
What is the GLM Mortgage Group?
GLM Mortgage Group, powered by Dominion Lending Centres, is your Vancouver and Lower Mainland Mortgage Brokerage service. We are always ready to move forward with you to obtain the mortgage you need with the sharpest mortgage rate available. Whether it’s a fixed rate or variable rate mortgage you are after, we are dedicated to finding the best mortgage rates in Vancouver, including Home Loans, Consolidation Loans, Lines of Credit and more. No matter what you need, our team of Mortgage Specialists will follow through to find the best mortgage product that fits your individual circumstances. Our free online mortgage calculator keeps you informed on how much your mortgage payment will be as well as show how different mortgage rates will affect the mortgage you require.As your Vancouver mortgage broker, GLM Mortgage is committed to clear communication with our clients. We make sure you are informed on all the mortgage options available to you. We call you back within 90 minutes to make sure that you have the fastest service available. We are not only available in Vancouver and the Lower Mainland, we are also available across Canada.GLM Mortgage Group is your Vancouver mortgage specialist. With over 22 years of experience in the investment industry we know how to wade through the challenging process of getting a mortgage. We provide smarter options to putting your mortgage in place. We know how important it is to have an experienced professional Mortgage Specialist available to walk through your mortgage experience and stay with you through to the very end.We get you a fast “YES” at the sharpest rate… guaranteed! Call us now so that you can get that mortgage you’ve been waiting for. We already have been working for you, making sure that you will have every option of a mortgage available to you. GLM Mortgage Group is on call for you!