Compare the lowest 3-year variable mortgage rates in Ontario. Below are the best 3-year Variable mortgage rates currently offered in Ontario by Banks, Brokers & Credit Unions.
Specification: HSBC 3-year Variable Mortgage Rate
Specification: BMO 3-year Variable Mortgage Rate
Compare the Best 3 Year Variable Mortgage Rates in Ontario
The variable mortgage rates expose the borrower to the interest rate changes and thus their mortgage payments. If the rates in the market fluctuate, the borrower will incur the difference in the interest that’s applied to their mortgage principal. Additionally, if the borrower’s mortgage payments have been structured so they can pay a fixed charge per month – with the changes in the rate affecting the principal portion and the interest – then the schedule of the mortgage payment may also undergo changes.
The 3-year variable mortgage rate is very sensible if the borrower foresees their mortgage breaking within a few year time. For instance, if you are looking forward to upgrading your home, opting for the 3-year variable mortgage rate over the 5-year rate will save you some good amount of money.
How Popular is 3 Year Variable Mortgage Rates in Ontario
About 20% of the Canadian population have a mortgage term between 2 and 4 years, with the younger population having a figure slightly higher. The younger population have reduced the urgency to lock into the rates for a longer period of time.
The 3-year variable mortgage rates have a penetration of about 29% out of all the mortgages, meaning that it’s not as popular as the fixed mortgage rate. This is as a result of uncertainty related to the interest rate fluctuations.
Pros & Cons of a 3yr Variable Mortgage Rate
The 3-year variable mortgage rate is chosen by people due to the following reasons:
- It has lower rates as compared to the 5-year variable mortgage.
- It gives the refinance flexibility with no penalty.
- It’s good when not planning to own a home for a period that is longer than 3 years.
- The penalty is lower if you break the mortgage earlier.
This mortgage term has a number of disadvantages as well:
- If the rates become higher, the interest costs will also hike.
- It’s hard to get a variable rate approval if your debt ratio is above average.