CIBC has three options for a variable rate mortgage. The CIBC Variable Rate Open Mortgage, the CIBC Variable Flex Mortgage and the 5 Year Closed Variable Rate Mortgage.
CIBC Variable Rate Open Mortgage
CIBC’s variable rate open mortgage is a great option for those looking to pay their mortgage off faster. The annual percentage rate (APR) will fluctuate with prime, which is the interest rate at which banks borrow from each other. But unlike fixed-rate mortgages, there is no penalty for paying your mortgage off early—you can prepay your loan at any time without incurring additional fees or penalties.
The CIBC variable rate open mortgage also does not have any monthly fee associated with it.
CIBC Variable Flex Mortgage
The cibc variable mortgage rates is a 5 year fixed rate mortgage. The interest rate is fixed for 5 years, but the payment is variable. Your monthly payments will fluctuate based on changes in the Bank of Canada overnight rate (OIR).
The key features of this mortgage include:
- A 5-year fixed interest rate. That means that your monthly payments won’t change during that time period and you’ll know exactly how much money you need to pay each month;
- A variable payment schedule tied to changes in the OIR, which could either increase or decrease depending on market conditions; and
- No penalty charges if you want to prepay your mortgage early and withdraw funds from an RRSP before retirement age.
5 Year Closed Variable Rate Mortgage
The 5 Year Closed Variable Rate Mortgage is a variable rate mortgage that offers a fixed interest rate for the first five years of your mortgage term. It was introduced on May 1, 2016 and is available for new mortgages only.
For example: If you were to take out a $500k 5 year closed variable rate mortgage with an interest only payment of $2,000 per month (20% down) your monthly payments would be $3,957. Your initial interest rate (the fixed portion) would be 3.09%. After five years pass and you need to renew your mortgage, the renewal amount is based on the current market value at that time.*
CIBC offers three options for a variable rate mortgage:
- Variable-rate mortgage with fixed payment or interest-only when you can’t pay off your mortgage in full. Some mortgages have reduced payments, but not always. This strategy might work if you want to pay off your mortgage early and spend the bank’s money elsewhere.
- Variable-rate mortgages with an open prepayment option (OPO) enable homeowners who pay off their loans quicker than planned to alter their payments, but only during particular periods and under certain circumstances.
- Variable-rate mortgage with no additional fees or charges (NECF$), similar to OPO but without limits on how frequently borrowers may adjust their monthly expenditures to lessen them or pay more than they owe if something unexpected occurs financially, such losing a job or inheriting money.
CIBC’s variable rate mortgages offer more flexibility than other banks, but you should still think carefully about what type of mortgage best fits your needs. If you are looking for a variable rate mortgage and want to know more about CIBC’s offerings then check it here.