As a mortgage broker many people ask me for an opinion as to the best strategy at mortgage renewal time. As of this date March 26h 2010 we have probably the lowest interest rates we will ever see. In my 35 years I have never seen rates so affordable in Canada. 1.85% open, 3.35% 3 year,3.64% 4 year and 3.79% 5 year. Those are the rates being offered right now by one of our lenders OAC (On approved credit) So if you are looking for the lowest interest rates you don’t have to look far. Yes credit has tightened up but if you are in a position to refinance now might be the best time we’ve seen or may see again in years.

Mortgage renewal is a personal and individual decision based on your own tolerance for risk. The obvious best rate is the 1.85% open but an open mortgage is tied to the prime rate and could and probably will go up so there is some risk involved if you get caught in the upswing. The least amount of risk is the 3.79% locked in for 5 years with no chance of your principle and interest payment changing for 5 years. This eliminates any guess work and worry about rate changes for 5 years. One thing to consider is that if your planning on selling in the near future an open mortgage can be paid out with out any penalty. If that is your plan an open might be better.

There are various things to consider and many products to choose from on the mortgage market. A good mortgage broker or lender can advise you but ultimately the decision is up to you as to what mortgage solution best fits your individual circumstances and future plans.

Yours in Mortgages

Larry Matthews