Lock in Secured Line Of Credit or not?

[rpm2203]

Hi,

I have a secured line of credit with my bank. I don't expect any time to pay this thing off. I do have the option of locking in a rate and am wondering if this is really a good idea.

Current: I am paying 3.25% on a line of credit. Compounded monthly.

Proposed: Lock in for 1 or 2 years at a lower rate, but intererst calcualted as it is a 'mortgage' - that is compunded semi anually and amortized over 25 years.

So I am wondering if this is really a good idea.

It looks like it is, but then when you amortize over 25 yrs, most of your payment goes to interest in the early years, and not much to principal. So maybe it is not as good as it looks.

Comments appreciated.

[trent]

I expect interest rates to move much higher in the next year or two, and if I had a variable rate loan I would lock in, in the current low rates. Do your own research and decide if locking in will work for you.

[Rickson9]

I expect interest rates to move much higher in the next year or two, and if I had a variable rate loan I would lock in, in the current low rates. Do your own research and decide if locking in will work for you.

The gap between fixed rates and variable rates is widening. The bond market controls fixed rates and Carney controls the short rates. Hm, I wonder which way I should go...

http://www.thestar.com/business/money911/article/801265--roseman-when-mortgage-rates-rise-is-it-time-to-lock-in?bn=1