Compare the Best 1 Year Fixed Mortgage Rates in Canada

Most consumers in Canada are not certain how the mortgage rates will change in the near future. Additionally, most consumers are also not sure whether the fixed or variable rates will serve their financial needs better. As such, selecting the one year fixed rate allows you to observe the market.

The 1 year certainly fixed mortgage rates are usually lower as compared to the five year fixed mortgage rates in flat or falling interest rate surroundings. Some consumers continue to lock into the one year fixed mortgage rates year after another. You can achieve the same strategy via the variable mortgage rates since they are usually lower compared to a 1 year fixed mortgage rate and can also be converted to the fixed mortgage rate without any charge.

How popular is 1 Year Fixed Mortgage Rates in Canada

About 1 out of 16 borrowers pick the 1-year mortgages in Canada, meaning that it is the least popular, in spite of the popularity of fixed-rate mortgages. Fixed-rate mortgages have a popularity of about 66% in the market while the 1 year fixed rate mortgages have only 6% dominance in the Canadian market. Its popularity also doesn’t vary much with time.

In order to get the 1-year mortgage rate term, most lenders would require you to prove that you are in a position to make payment with reference to a qualifying rate, such as a 5 year fixed rate.

Pros & Cons of a 1-year Fixed Mortgage Rate

The 1 year fixed mortgage rates are among the shortest mortgage term commitments and people chose it due to four main advantages:

• It is much lower as compared to other terms.
• Those who select the 1 year fixed mortgage rate only expect a mortgage not longer than twelve months.
• It gives them refinancing flexibility since they can renegotiate it sooner without incurring penalties.

The 1-year mortgage also does have some disadvantages:

• Renewal within a year will mean that one may have to incur the switching costs frequently if they change the lenders.
• If the rates jump, one has no protection at renewal as they would be in the case of a long fixed term.