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Westoba Credit Union

Homebuyers Choose Predictability and Stability over Best Rate

Written by: Tristan Vera

For many of us, the purchase of a home will be the single, most significant investment we make in our lifetime. Along with the many decisions that come with buying a home, one of the first will be deciding between a fixed or variable rate mortgage.

In a recent online Facebook poll that Westoba conducted, 82 per cent of respondents told us they prefer fixed-rate mortgages over variable rate mortgages. These results are in line with industry averages.

As the name suggests, with a fixed rate, your mortgage rate and payments remain the same over the term of your mortgage agreement. With a variable rate mortgage, your rate and payments will change based on the prime lending rate set by your bank or credit union.

“The first question I ask members is whether they’re comfortable with the rate going up,” said Financial Consultant, Tristan Vera located at Westoba’s Portage Avenue location in Winnipeg.  “Depending on your stage in life, a change in your monthly payments can add unnecessary stress.”

If a member prefers to have consistent payment amounts, then a fixed rate is likely the best option for them. However, if a member feels like they can handle potential fluctuations, they may want to go with a variable rate, which could result in lower payments if the rates remain low/stable. It really comes down to a personal choice.

If you’re unsure which option is right for you, make an appointment with one of our friendly, professional Mortgage Specialists and we’ll help find a mortgage that works for you.

Quick reference guide for Fixed or Variable Mortgage Rates:

FixedInterest rate and payments are fixed.Easy to budget for and reduces uncertainty. If rates drop, you may pay more for the security of fixed payments.
VariableFluctuates with changes in prime interest rate.Can be less expensive if rates remain low/stable.Must be able to tolerate financial uncertainty should rates increase during the term.