Thinking about buying a home but don’t have enough for the down payment? You may want to consider getting a CIBC mortgage with a variable rate. A variable mortgage has an interest rate that doesn’t remain constant but fluctuates based on market conditions. In general, these mortgages are cheaper when interest rates are high, and vice versa.
Regardless of your budget and financial situation, there are many things you should know before signing any documents. The process of choosing the right CIBC mortgage isn’t as simple as going to one lender instead of another—there are a lot of factors you need to take into account before you make your final decision.
What Is A Variable Mortgage?
A variable mortgage is a type of mortgage in which the interest rate and monthly payment are not fixed. Rather, they are based on the rates of a financial benchmark such as the three-month Treasury bill rate. Variable mortgages are useful for those who can’t afford a large monthly payment on a fixed mortgage. They also allow people to obtain lower rates when interest rates are low and higher rates when interest rates are high.
How Does A Variable Mortgage Work?
Variable mortgages are simple: the interest rate and monthly payments are based on the three-month Treasury bill rate. If the T-bill rate goes up, so will your payment. If it goes down, so will your payment. You’ll pay a fixed rate of interest on the amount you borrow, plus a variable portion that takes the T-bill rate into account.
Variable mortgages have many benefits. They allow you to get lower rates when interest rates are low and higher rates when they’re high.
Pros Of A CIBC Variable Mortgage
– You can get a lower interest rate when interest rates are low. When rates are low, borrowers can secure lower interest rates.
– You can get a higher interest rate when interest rates are high. When rates are high, you may want to consider locking in a lower interest rate with a fixed mortgage.
– You can put down as little as 5% for your down payment. This could help make the home-buying process easier and less costly for you.
Should You Get A Variable Or Fixed Mortgage?
Variable mortgages are great if you’re looking for a lower rate when interest rates are low. But if rates are expected to rise, a fixed mortgage may be a better option for you. Fixed mortgages are secured by a set interest rate for the life of the mortgage—even if the T-bill rate goes up, you won’t have to worry about your rate going up.
How To Choose The Right CIBC Mortgage For You?
There are a lot of things to consider when choosing a mortgage, including your down payment, monthly payment amount, and credit score. If you want to purchase a home with a low-down payment, you will probably be required to get a mortgage with a high-interest rate. On the other hand, if you have a high credit score and a high down payment, you might qualify for a lower interest rate.
Choosing the right CIBC mortgage is a critical decision you’ll have to make when buying a home. This decision is even more important if you’re a first-time homebuyer, as you may not have a lot of experience with mortgage terms. With a variable mortgage, you can get a lower interest rate when interest rates are low and a higher rate when cibc variable mortgage rates are high.