Friends,
Ever since mortgage rates, 2.99 % for 5 year fixed for 25 years of amortization were announced by banks. I got so many inquiries, asking how much can we afford with this interest rate ?
Is it a good rate ? what are the pros and cons ?
I explained pros and cons back in January when BMO offered discounted rate first time.
Don't worry I am going to repeat those pros and cons, however before that, have a look at the table below.
I have tried to show that if a family can afford to pay $1000 in rent, they can easily afford a condo with a price tag of $250000, of course you have to consider the cost of property tax and utilities.
I have tried to show that if a family can afford to pay $1000 in rent, they can easily afford a condo with a price tag of $250000, of course you have to consider the cost of property tax and utilities.
Now the pros and cons of these low low mortgage rates offered by BMO!
In my view it's a very good deal for those home buyers who can afford 25 years amortiazation. But for those who are on the border, they have option to go to other big banks RBC, TD, CIBC - all are offering low rates but for 4 years and the good thing is 30 years amortization.
Here are some comparision between traditional 30 years mortgage and 25 years with @ 2.99 %
Traditional Mortgage 2.99 % Mortgage
1) 30 years amortization 25 years amortization
2) 20 % Once a year lump sum payment 10 % once a year lump sum payment
3) You can double up a payment You can't skip or double up a payment.
4) You can refinance or switch your lander You can't refinance or switch your lander
Best regards,
Ritesh JoshiYour Next Door Realtor
647-281-3424
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