SMR Mortgage

Fixed Vs. Variable August 3, 2010

While it true that over the long term historical trend 5 year variable rates do beat 5 year fixed most of the time you must consider that 5 year fixed has still been the better choice 20 % of the time.

The common theme for when 5-year fixed turns out to be the winner is periods when you see an upturn in interest rates. Sound familiar? We are entering such a period right now. Prime rate has already started to move higher and is likely to continue moving higher for now.

Be cautious when choosing the variable product. It’s not always a guaranteed winner. Additionally, if you are on a tight budget or you find a fantastic deal on a 5-year fixed it may be worth it for you to pay a little extra for the insurance of a fixed low 5 year rate.