Should I Lock In To A Fixed Rate?

Tuesday Aug 02nd, 2022



Should I Lock In To A Fixed Rate?

Date Posted: May 5, 2022    From Mortgage Brokers Jason Kays 

When interest rates begin to rise, we get asked this question a lot. There is no right answer and every person’s own situation is unique and could have a different answer. Typically, you would need to assess your own situation to find which answer is best for you. We’ve put together some questions and scenarios you should consider to find out what would work best.


Have you had any sudden life changes? Did a spouse stop working? Did you have an additional income added? Depending on your situation, it may be best to increase your monthly payments using the pre-payment privilege feature afforded with your mortgage. Why? If rates will be increasing from 2% to 4% over the next year, you may find it’s best to increase your own payments to that 4% amount now, so that when the increase happens; you are insulated against the increase. Furthermore, all additional payments go straight to paying down the principal on your mortgage.


Are you having trouble affording your payments? If you are already maxed out and don’t have much breathing room for the rates to increase, it may be best to lock in your current rates. The rates are forecasted to raise over the next year or two, so you know now this will be the lowest rate you’re going to get for a while. It may be best to lock in your rate.


Is the fluctuation of rate changes stressing you out? There is no point in stressing over things that you have some control over. If locking into a rate would give you peace of mind, then it may be worth doing so. Variable rates can save you some money, however, if it’s causing stress to you on a day-to-day basis then it may be worth locking in for your own worries.


Every person has their own unique situation, and different strategies suit certain situations more appropriately. The best thing you can do for yourself is try to plan ahead instead of making last minute and impulse decisions. 


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