Well folks if you’ve had problems accessing this site over the last few weeks, you are not alone.

I still don’t have a clear answer from my hosting company. It’s all back and working they way it was. I was just locked out for a few weeks. No biggy right? Sheesh. Barring any more hosting issues, we’ll do our best to post something weekly.

Anyway, at last post the Fed in the US dropped 3/4 point. Markets did a little correction and now seem to be recovered from their little blip.

Our dollar remains strong, however our economy is starting to feel the pinch from the slow down in the US. The story seems to be consistent from the economists (unusual I know). The general feel is the US Fed will drop as low as 2.5% and the Bank of Canada not far behind dropping to 3.5%.

What does that translate to the average mortgage holder? This is a great time to be looking at variable or adjustable rate mortgages. For those cashflow 202 fans think of it as “shorting” your mortgage (bit of a stretch I know, same concept you are predicting the rate will drop). As rates drop, your monthly payment goes down. When you think it’s hit bottom, lock in for 10 years!

In most cases, your monthly amount wont change, but the cash on hand with the lender will be significant at the end of the year/term. Lenders always build in a buffer zone for variable rate payments, to avoid calling you mid-term after rates have gone up and ask (ok, demand) more monthly. Most lenders will give you the option to pay down the principal or “take the money & run”.

I’d be curious to see how many variable mortgage owners lock in after a 1/4 point hike vs those that wait until the end of their term.