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最初由 丫丫 发布
For me, the reason I choose variable rate is that I believe even the prime rate reached higher than 5%, the 5 year interest cost is still less than a fixed 4.?% 5 year plan.
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You are absolutely right.Because the yield curve is not flat and the mortgage loan is amortized, the breakeven point should be beyond the 5-yr fixed rate.
Definitely, VRMs are now cheaper than FRMs and I believe the rates will remain low for a while. As such, VRM may be a better choice, but only temporarily.However,in long run, especially after the teaser period and if the rates hike up, VRM may end up causing you more than FRM.
Personally,I took a 5-yr fixed mortgage for the peace of mind. There is no free lunch.Everything has a price. I think the bottom line is to balance your budget,i.e., match your assets with your liabilities.I know most VRMs have a clause allowing you to convert your VRM into FRM(to lock in).So for those who choose VRM,just keep an eye on the rates.
