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Fixed vs Variable mortgages in current conditions

  • Fri, June 24, 2022 12:03 PM
    Reply # 12827835 on 12827295
    Christian Szpilfogel (Administrator)

    For BRRRR or repositioning projects, I tend to go variable for the reasons you state. However, I have at times used fixed mortgage products that have a term that aligns with my exit timeline. If I run over then it just becomes an open mortgage. On my stabilized assets, I have a higher mix of fixed vehicles more for operational cash flow predictability. That and the fact that with commercial assets, variable products are rare.

    Here is an article I wrote (with feedback from John Walsh) on managing risk with respect to variable vs fixed products: https://aliferous.ca/should-i-go-variable-or-fixed-rate-mortgage/

  • Thu, June 23, 2022 10:20 PM
    Message # 12827295
    Deleted user

    A lot of new investors like me at the BRRR refinancing stage will have a tough time deciding whether to go with Variable vs Fixed rate mortgages due to Gov continuous rate hikes. Variable gives pre-payment flexibility and examined historically, variable rates have proven to be less expensive over time but history repeats itself until it doesn't. Would be interested in knowing the thoughts of this group. 

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