Situation:
5 year fixed offer @ 1.59% with $2000 cashback
vs.
5 Year Variable @ prime -1.1% with $250 cashback
-First time home buyers in a major city. small-ish 2 bedroom condo that we plan on staying at for 5 year minimum HOWEVER when we start a family in a year and a half our opinions may change and we may need some more space.
-Breakage fees for the fixed is $$$$$$, but is portable for basically nothing except the new rate
-Variable breakage is standard 3 months interest, so in this case around $1500.
With the BoC wanting to keep interest rates low for at least 2 years, and the option to pay very little to break the mortgage, are we crazy to not lock in the fixed with cash back? If prime raises .5 percent over the last 2 years we will basically be breaking even with the fixed with cash back but have the flexibility to break for little fee.
Are we making a mountain out of a molehill by not just going with the fixed? Rates are still dropping every 2 weeks so its a bit of a dance heading into the winter... but seeing prime -1.1 is hard to ignore
Any thoughts/comments/curse words/kittens are appreciated.
5 year fixed offer @ 1.59% with $2000 cashback
vs.
5 Year Variable @ prime -1.1% with $250 cashback
-First time home buyers in a major city. small-ish 2 bedroom condo that we plan on staying at for 5 year minimum HOWEVER when we start a family in a year and a half our opinions may change and we may need some more space.
-Breakage fees for the fixed is $$$$$$, but is portable for basically nothing except the new rate
-Variable breakage is standard 3 months interest, so in this case around $1500.
With the BoC wanting to keep interest rates low for at least 2 years, and the option to pay very little to break the mortgage, are we crazy to not lock in the fixed with cash back? If prime raises .5 percent over the last 2 years we will basically be breaking even with the fixed with cash back but have the flexibility to break for little fee.
Are we making a mountain out of a molehill by not just going with the fixed? Rates are still dropping every 2 weeks so its a bit of a dance heading into the winter... but seeing prime -1.1 is hard to ignore
Any thoughts/comments/curse words/kittens are appreciated.