Tuesday, May 06, 2008

5 year rates finally dropping, but options are changing

Although the prime rate has been dropping, we have not experienced much change in the current 5 year fixed rates, until now.

There are still many people who are not comfortable with a variable rate mortgage, and feel much more comfortable with a guaranteed rate.

There are mortgage brokers that can now offer a 5 year fixed rate of 5.19%

This new product is what they are calling a 'no frills' mortgage, meaning it does not come with the same prepayment benefits of a regular 5 year fixed product, which the vast majority of home owners don't take advantage of anyway.

This makes it a perfect product for first time home buyers with limited opportunities to make lump sum payments during the first 5 years, or anyone just looking for a simple low interest fixed rate.

While there is 0% lump sum prepayment benefits, this product does allow for a 10% increase in the regular payment amount per anniversary year.

Borrowers can also take advantage of the same accelerated bi-weekly or weekly payments to pay down their mortgage sooner.

You may wish to consider taking this mortgage. If interested, email me and I will put you in contact with lenders that offer this product.


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