Interest Rates are On The Rise – Is It Time to Consider an Open Mortgage?

Welcome to story time with Uncle Lauren…

Today’s story takes place way back at the turn of the century.

In 2001, (Admit it, you thought I meant 1900.), I moved into what would become my first home.?I rented it from a friend for a couple of years and then he sold it to me.?

My buddy was a mortgage broker and a pretty savvy investor in his own right and when he saw the market starting to correct after the dotcom bubble burst, he jumped at the opportunity to sell the house at the top of the market.?

He made a tidy profit and a commission on the mortgage deal. ??

At the end of the day, he made out like a bandit.

I, on the other hand, ended up buying a house that promptly went down in value and had to carry a mortgage for the next 5 years at 5.25%.?

I’m not bitter, the downturn didn’t last long and when my job transferred me in 2007, I made a nice profit too.?But I made one big mistake, knowing that I was likely to be promoted and transferred, I still chose a fixed rate, closed mortgage instead of an open one.?That meant that when I sold, I had to pay a penalty of over $1500 for breaking the terms of our agreement.?

With interest rates on the rise and volatility in the markets projected to continue for the foreseeable future now might be a good time to consider the advantages of an open mortgage.?

Here are three reasons why:

·???????An open mortgage gives you more repayment flexibility

·???????There is a significant cost to breaking a closed mortgage

·???????There is no difference in how you would qualify for either an open or closed mortgage

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For more information on the different types of mortgages check out this helpful link from our friends at Canada Life or call me anytime.

https://www.canadalife.com/investing-saving/mortgages/open-vs-closed-mortgages.html?hsamp_network=linkedin&hsamp=b2uWgQdwmifD

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Lauren

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PS – Canada Life has been offering mortgages since 1847 and is one of the oldest and most flexible mortgage lenders in the country, in my opinion it’s their best kept secret.

PPS – Here is a link to the current mortgage rates from Canada Life.?https://www.canadalife.com/investing-saving/mortgages/mortgage-rates.html