http://yourlineofcredit.com Understand Your line of Credit Sun, 04 Mar 2012 14:37:03 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://yourlineofcredit.com/2012/02/10/where-are-mortgage-rates-headed-in-2012/#comment-13 Ramesh Sun, 04 Mar 2012 14:37:03 +0000 http://yourlineofcredit.com/?p=46#comment-13 I have a variable magtroge. As a matter of fact I just moved it to another lender (paying the penalty) for a better variable rate ( 0.6 + prime to -.3 below prime) after only 1 year with our current lender (of a 5 year term). So yes I went from 2.85% to 1.95% on a 305K magtroge. For me it was worth it. My payments are exactly what they were when we started at the first lender a year ago + ago when my rate was at 4.10% (just before the decline in the interest rate). I was able to knock 7 YEARS off my ammorization in 10 months (based on the annual magtroge statement) just by leaving my payment at the higher amount while the interest rate took a dive. A fixed rate would not have allowed me to do that despite using the accelerated optoins available with fixed rates.When the interest rates increase my magtroge will be less as I have been making payments. The increase of the variable rate will establish my new payment on my current magtroge amount. So my breaking point today is different than what my breaking point will be July 1st when my mortage is $5K less than what it is now (and so on as the BoC rate changes). But point is that if interest rates literally doubled (ie; 2.25% to 5% for example) today then I might be worried but if they gradually increase then I will be fine. And I always have the option of removing the accerated option as well. I have a variable magtroge. As a matter of fact I just moved it to another lender (paying the penalty) for a better variable rate ( 0.6 + prime to -.3 below prime) after only 1 year with our current lender (of a 5 year term). So yes I went from 2.85% to 1.95% on a 305K magtroge. For me it was worth it. My payments are exactly what they were when we started at the first lender a year ago + ago when my rate was at 4.10% (just before the decline in the interest rate). I was able to knock 7 YEARS off my ammorization in 10 months (based on the annual magtroge statement) just by leaving my payment at the higher amount while the interest rate took a dive. A fixed rate would not have allowed me to do that despite using the accelerated optoins available with fixed rates.When the interest rates increase my magtroge will be less as I have been making payments. The increase of the variable rate will establish my new payment on my current magtroge amount. So my breaking point today is different than what my breaking point will be July 1st when my mortage is $5K less than what it is now (and so on as the BoC rate changes). But point is that if interest rates literally doubled (ie; 2.25% to 5% for example) today then I might be worried but if they gradually increase then I will be fine. And I always have the option of removing the accerated option as well.

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