How to decide - variable rate mortgage compared to a fixed

Not much has changed in this debate changed dramatically in recent years. It is still not a simple answer that works in any situation and fit all your personal financial situation.

What we now know that the monthly payments of fixed-rate mortgage (FRM) will be significantly higher than the adjustable rate mortgages (VRMs). This is today.

Many wonder whether the rise in interest rates, which will always be the case, however, a few years ago. Nonesafe.

We list some important angle, I think, and end up being a very interesting statistic that can help put a very good prospect and get comfortable with your decision to disclose. This little known fact is surprising, as can not find it anywhere with ease.

If this dilemma was to be fully decided on the numbers, the decision may actually be quite simple. However, if you are "unknown" personal matters, such as throwing and risk-takingAbility to mitigate the risks, the decision becomes more difficult. It's not just about numbers, but based on the emotions begin to play an important role. Many good mortgage broker will tell you that "there is no right or wrong choice."

When deciding on my personal residence mortgage Looking for a few factors:

Job stability - how stable is my job, my income will increase or remain the same
I'm fine with having to pay more and pay less or the peace of mind and face theany payments increase over time.

If I choose a mortgage for an income property, then it is cash flow. Cash flow is what you left in your pocket after all expenses are paid from the rents collected.

Less interest is equal to cash flow as at the end of the month
Make sure the cash flow to support the increase in interest rates
Always stress test of the property, provided significantly higher prices to ensure that the investment will perform inhigher future interest rates, which is - these investments are still a way to make money when interest rates rise to 6%?

For now and for the near future all my loans are variable.

Note that, because, like mortgages and legal documents can be sent there a big difference in penalties if they try, made ​​from fixed to floating, a variable penalty area only 3 months of interest and no longer limited. So in future if youdecide to switch to fixed, it can be very expensive to do so.

And here are the statistics that I quoted at the beginning.

From 1950 to the current variable rate to fixed rate beats 88% of the time. I'm fine with the odd. You must decide for themselves.

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