Royal Bank of Canada

Fixed Rate Mortgage

 

-Locked interest rate = secure

-Everything will be expected:

             Interest rate of your mortgage

             Amount of regular mortgage payments

             Portion of the payment that goes toward principal and interest

             The amortization of the mortgage (how long it will take to pay it off)

-Rate guarantee

 

Variable Rate Mortgage

 

-Able to pay down a bigger chunk of their principle

-Float rate can change quickly and the % of the risk rate

-Prime rate goes down = pay more towards the principle

-Prime rate goes up = pay more to the interest cost

-lower interest compare to fixed rate’s interest

-low interest means save more money and pay off mortgage quickly