Get the best deal for your mortgage

(NC)-Have you ever considered a variable-rate mortgage (VRM) for your home? Surprisingly, most Canadian homeowners haven't, even though a VRM can be the cheapest way to buy a home.

A typical mortgage carries a fixed interest rate. This means that the interest rate remains the same for the term - say, five years - and is only changed when the term expires. With a VRM, by contrast, the rate can vary at any time. It goes up and down with the prime rate.

For some homeowners, the prospect of a variable rate is unnerving, and they opt for the security of a fixed rate. In doing so, however, they are paying a premium. Lending institutions like banks set their fixed rates at a significantly higher level than their variable rates. Over the long term, that can cost a homeowner thousands of dollars in extra interest.

Banks also have special offers that make their variable rate mortgages even more attractive. CIBC, for example, offers a special discount of 1.01% off its prime rate for the first 9 months of its Better Than Prime mortgage. For the rest of its 5-year term, the rate varies at 0.25% below prime.

If you're in the market for a mortgage, it makes sense to talk to your personal banker of financial advisor about a VRM. They can explain to you the risks and advantages of variable rates. For more information, contact your local CIBC branch, or visit the CIBC website at www.cibc.com.