A variable rate mortgage up in Canada is actually a very safe mortgage. The Bank of Canada sets it's rates about every 3 months, there are times that
there is an unscheduled movement in rates but historically this has been downward to stimulate the economy. Secondly most variable rate mortgages have a lock
in feature that would let you lock in at any time - something to consider if rates start to creep up and hit what you would have locked in at had you gone
fixed. It doesn't seem that you can compare the American Real Estate system with the Canadian (at least in Ontario). I don't even know what is this
escrow you speak of, although I have heard the term, we don't use it here. Another thing is that when you get a variable rate mortgage the bank sets your
payment at the fixed rate amount thus making your amortization period lower and protecting the borrower from small rate fluctuations The other side of this
coin is more of each payment goes toward principal and saves you a ton of interest over the life of the mortgage.
Because Canadians cannot deduct mortgage interest on their income tax they tend not to mortgage to the hilt and stay that way, there is really no benefit. Now on investment properties, people do that all the time, suck equity out as often as possible as the interest paid on investments is tax deductable.
Because Canadians cannot deduct mortgage interest on their income tax they tend not to mortgage to the hilt and stay that way, there is really no benefit. Now on investment properties, people do that all the time, suck equity out as often as possible as the interest paid on investments is tax deductable.
