Canadians looking to refinance their existing mortgage or purchase a new home within the next 6 months should obtain a 1 year Fixed Rate Mortgage. This will allow the well informed consumer to lock into a Variable Rate Mortgage (VRM) with a more favorable interest rate in the next 12 to 18 months. It is our belief that the premium currently being charged on these VRM’s will disappear.

Like any financial product VRM’s are priced by the market. We strongly believe that VRM’s will decrease in price to consumers over the next 12 to 18 months. This decrease will be a result of an increase in mortgage lender demand for VRM’s and a decrease in the cost associated with those lenders holding VRM’s.

We will go on to explain why this has happened, what we expect will happen in the future and how the Canadian mortgage consumer will be able to benefit from a 6 year strategy. Continue reading →