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  • Writer's pictureMike Beer

Fixed Rate Versus Variable Rate Mortgage - How to Decide?




Here is an article that shows how over time variable mortgages win and how how it is to "beat the bank".

Take a look how over time variable is always more favourable. But wait! Not so fast. What about investors?



Investors should be a little more careful. If you have a lot of surplus of positive cashflow and very small portfolio of properties then choosing a variable mortgage makes sense. However, if your cashflows are raiser thin and you couldn't handle increased payments then think about a fixed... especially if the mortgage is very large or if you have a larger portfolio. In that case it could be a huge risk if the mortgage rates increase and so do your payments and then all of a sudden you find yourself in a negative cashflow situation. Yikes! To be safe you want to consider fixed rate mortgages if your cashflows are already very low. Work with a mortgage agent that understands real estate investors ... they can provide great advice.

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