To help navigate this uncertain landscape, here we look at the advantages and disadvantages of last-minute fixed-rate deals.
One of the biggest upsides of last-minute fixed-rate deals is that they can offer significant savings. Since lenders are typically more flexible with rates near the end of a term, shoppers may be offered discounted rates when they choose to switch. This flexibility also allows borrowers to have more time to evaluate their repayment plans. Furthermore, these deals typically have lower closing costs than standard mortgages, as banks are often willing to waive most (if not all) of the closing costs to secure the business.
At the same time, last-minute fixed-rate deals also come with certain drawbacks. For instance, they are often seen as a higher risk in terms of repayment as there is a greater likelihood of defaulting on such deals. Furthermore, these deals may come with restrictions such as minimum credit scores or debt-to-income ratios. Another potential downside is that if the borrower does not pay attention to the details of the agreement, they may find themselves stuck paying a higher interest rate than they should have.
Overall, last-minute fixed-rate deals can offer great savings, but it is important for borrowers to consider the potential risks before making a commitment. As with any loan decision, it is recommended to thoroughly research the market and compare the options available to determine the right fit for one’s unique financial situation. By doing so, borrowers can ensure that they make an informed decision and opt for the best deal possible.
Last minute fixed-rate deals can be a great way for Canadian borrowers to save money on their mortgages. These deals can offer significant discounts on interest rates from lenders, as well as reduced closing costs. However, these deals can also come with increased risks, due to the fact that borrowers may default or find themselves in over their heads with payments they hadn't planned for. It is important to do thorough research, consider the risks, and compare different deals and lenders before choosing a mortgage option. By understanding the pros and cons of last-minute fixed-rate deals, Canadian borrowers can make a smarter financial decision and ensure the best deal possible for their unique situation.
This article was contributed on Jul 21, 2023