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Author:
Ego Feathers Jr.
Web Site: http://www.1st-choice-loans.com
Payment
predictability thy name is Ontario fixed mortgage rate
The
Ontario fixed mortgage rate is a mortgage in which the monthly payments
remain the same for the term of the loan as opposed to the
adjustable mortgage rate in which monthly payments change with
the change in market indices. Also, the fixed mortgage rate
mortgages are self-liquidating.
When interest
rates went up to the double digits in the early 1980s, many
people were pushed out of the fixed mortgage rate mortgages. The
Lenders responded with a new type of loan that tied mortgage
interest to a variable index, such as U.S. Treasury Bills, in
order to go below the conventional fixed mortgage rate. An extra
2 percent or 3 percent, known as the margin, was tacked on to
originate the loan this is how the adjustable rate mortgage
(ARM) came to be.
Starting rate of
an adjustable loan can be one to four points lower than a
conventional 30-year, fixed mortgage rate. But let us not be
fooled by the short-term gain as you can end up paying an ARM
and a leg in the long term.
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