Best 5-Year Variable Mortgage Rates Ontario
5 Year Variable Mortgage Rate is increasingly gaining popularity in Ontario. We shop around for the best and lowest mortgage rates currently offered in Ontario. Our Rates are updated daily and rest assured you will find the best mortgage rates below.
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5 Year Variable Mortgage Rates in Ontario
The 5-year variable mortgage rate exposes the borrower to the changes in the interest rates and hence in the mortgage payments. If there are fluctuations in the market, you’ll incur the difference in the interest applied to the mortgage principal. Variable mortgage rates are also less expensive compared to the fixed mortgage rates when subjected to historic examination.
The 5-year variable mortgage rate fluctuates according to the prime lending rate movements, which is simply the rate at which banks lend their creditworthy clients. The variable mortgage rate is basically expressed as a prime plus or minus percentage discount or premium.
How Popular is 5 Year Variable Mortgage Rates in Ontario?
Although the fixed mortgage rate is the most popular at 66%, the significant minority consists of the variable and adjustable mortgage rates. This, therefore, means that the 5-year variable mortgage rates are not as popular as the 5 year fixed mortgage rates, which also are slightly popular in the younger age groups than in the old ones. The 5-year variable mortgage rate is, however, popular for most borrowers.
However, the 5-year term is the most popular duration for mortgage rates. This is very logical given that 5 years is also the midpoint between 1 and 10-year term lengths available.
Pros & Cons of a 5yr Variable Mortgage Rate
5 year variable mortgage rate is Ontario’s most popular floating-rate mortgage and people choose it for the following reasons:
- People need a mortgage which has a cheaper penalty if they happen to break their mortgage contract much earlier.
- It gives more flexibility for early refinancing without penalties.
- Variable rates have cost borrowers fewer interests historically as compared to the long-term fixed rates.
However, 5-year variable mortgage rates also have disadvantages:
- The interest costs can increase if the rates increase highly.
- It’s difficult to get approval for variable rates if you happen to have a debt ratio that is above average.
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