(PRWEB) April 27, 2013
CTO of Syndiacted Mortgages Marcus Arkan analyzes new data from the Bank of Montreal concerning first time home buyers in Canada. According to the report the financial group estimates that 2000 eighteen year old new buyers are trending towards fixed rates as opposed to variable rate mortgages by more than a 2:1 ratio.
Mr Arkan expressed his views on fixed mortgages in a post saying that buyers usually see such mortgages as more economical prospects than their variable counterparts. When asked about the issue, the CTO had this to say, “The fact that the Bank of Canada may soon increase interest rates might be a reason since such action would undoubtedly increase the price of variable mortgages. Fixed mortgage rate owners, on the other hand, would be left unscathed.”
Mr Arkan emphasizes that new homeowners prefer fixed mortgages since they allow owners to choose a lock in period that can range anywhere within 3 months to 25 years. The mortgages rates do not change during this time hence the term “fixed” mortgages. The trading on fixed mortgages also depends on how mortgage backed securities are traded in the secondary market.
Fixed mortgage rates are also popular with laymen or citizens who do not have a very good idea about how the mortgage industry works. Mr Arkan points out that this is also why new home buyers tend to go for fixed mortgages. Unlike variable mortgages, the fixed variety is not susceptible to change as far as rates are concerned. In other words, a new buyer would not have to be familiar with fluctuating mortgage interest rates. The monthly payments for a fixed rate mortgage wouldn’t change regardless of rising interest rates either. Mr Arkan opines that homeowners also find this to be a viable option since it allows them to budget their finances more easily.
According to mortgage expert Laura Parson from BMO, "Buying a home is one of the most important financial decisions one can make. It's crucial that those planning to enter the market are well prepared - not only to manage their costs, but also to pay off their mortgage as soon as possible."
In the end, Mr Arkan concludes that the current state of the Canadian market and rising interest rates make fixed rate mortgages a more profitable prospect for buyers who are entering the buyer’s market for the first time. To learn more about Canada mortgage rates please visit the website http://www.syndicatemortgages.com.
About Syndicated Mortgages
Syndicated Mortgages enjoys acclaim as one of the Canada’s leading mortgage firms. The firm specializes in helping customers find the best mortgage rates in the country through a wide variety of lending institutions like credit unions, major banks and private funds. Syndicated Mortgages also partners with over 70 mortgage lenders across Canada.
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