Split rate mortgages provide savings and security
The surging popularity of split rate mortgages indicates that more and more Canadians are seeking to maximize the advantage of low interest rates while retaining the security of a fixed mortgage.
A recent Ipsos Reid poll indicated that 40% of Canadians who are considering a home purchase in the next two years plan to utilize the split rate option. This marks an 8% increase from a similar 2009 survey. These numbers seem to suggest that Canadians are becoming more comfortable with diversifying their borrowing options.
Split the risk
One of the major benefits of a split rate mortgage is it provides the security of a fixed rate with the potential cost savings of a variable rate allowing you to hedge your bets regardless of whether interest rates go up or down.
You set the balance
These mortgages typically allow you to nominate how much of your mortgage you would like to be secured with a fixed interest rate and how much you would like to put on a variable rate. Your mortgage split should be completely flexible – 50/50, 30/70 – you decide, based on your comfort level and tolerance for risk.
Peace of mind
While a portion of the mortgage rate is variable, your payments are fixed – what changes is the amount that goes to reduce your mortgage principal. A split rate mortgage comes with many other features designed to provide you flexibility and security.
Need help sorting through the options? Talk to an BlueShore Financial financial expert to help you determine the right mortgage for you.