Princess and I just renewed our mortgage. I have to say that it is a great time to do this, with interest rates being as low as they are tight now.
Considering the current economic situation, and probable inflation coming in the next couple of years (as a result of so much cash being infused into the economy), we decided to go with a 5-year fixed rate mortgage. We got a fairly good rate at 4.5% (down from 5.7% we had been paying since last year).
I am well aware that this is going against oft-mentioned statistics saying that a variable-rate mortgage usually (I think the statustuc is 90% of the times) comes ahead in the long run. And the variable rate of 3.25% was also appealing. However, I think we are in that 10% period where a fixed-rate mortgage will come ahead. I wouldn't be surprised to see interest rates climbing significantly in 2010. The big question will be by how much.
In addition to the renewal of the mortgage, we rolled in the heat exchange loan into our mortgage. That was a 10-year loan (taken 2.5 years ago) at a fixed rate of 8.5%. It was an ok rate at the time, but rolling it into our mortgage will decrease that rate by 4%, which is a lot.
All told, even with adding the heat exchange loan to our mortgage, our mortgage payments remain the same as they were before we renewed -- that's a decrease of about $150 per month. :o)
So what we are also doing is increasing our payments by that $150 per month. So our payments are remaining the same, but repayment of the mortgage will be faster.
As you can guess, we are quite happy with that. We could have gotten a better rate elsewhere (ING Direct was posting a 3.95% 5-year rate), but being able to roll in the loan, and saving the trouble of switching bank was good. And our credit union usually kick back parts of the interest paid by members, so our actual rate is lower than 4.5% (probably around 4.2%).
We also have a good relationship with our credit union. We are satisfied with what we got. :o)