Should You Lock In Your Variable Rate or Stay Variable? Key Insights for Shuswap Borrowers

By Leanne Mollica, Mortgage Broker — My Mortgage Strategy (Salmon Arm, BC)

With the Bank of Canada expected to hold rates steady again after more than four months without a cut, many homeowners across Salmon Arm and the Shuswap are weighing whether they should lock in their variable-rate mortgage or continue riding out market fluctuations. Inflation remains above target, with June’s headline inflation at 1.9 percent and core inflation near 3 percent, prompting the Bank of Canada to take a cautious approach. At the same time, bond yields have risen to six-month highs, pushing fixed mortgage rates upward. This divergence between economic indicators and rate trends has left many borrowers unsure which direction to take. Locking in can provide stability, predictable payments, and peace of mind for homeowners who prefer cost certainty. It may be especially beneficial for those who have been offered a competitive fixed rate, are planning to stay in their home long-term, have a tighter monthly budget, or simply want to eliminate the uncertainty tied to rate announcements and economic volatility.

Remaining variable can still be a strategic choice for borrowers who value flexibility. Variable-rate mortgages generally have lower penalties if broken, which can be important for those who anticipate moving, refinancing, or restructuring their mortgage. Borrowers whose variable rate remains lower than available fixed rates, who have fixed payments that help smooth cash flow, or who have relatively small mortgage balances compared to their income may also find that staying variable offers more advantages. In addition, if future Bank of Canada rate cuts occur late this year or early next, variable borrowers may benefit sooner than those in a fixed rate.

Before making a decision, homeowners should ensure they have all the facts. This includes reviewing the rate you are being offered to lock in, comparing options across lenders, assessing potential penalties if you switch lenders, and considering how much time remains in your current term. Because fixed rates are influenced by the bond market rather than Bank of Canada decisions, recent increases may continue even if the overnight lending rate holds steady. With the next Bank of Canada announcement scheduled for July 30 and most economists anticipating another hold, the current environment remains a “wait and see” landscape where strategy depends heavily on personal risk tolerance, financial stability, and long-term planning.

A personalized analysis can help determine whether locking in or staying variable aligns better with your goals. Reviewing scenarios side by side—factoring in payment differences, penalty risk, future rate forecasts, and overall financial comfort—allows homeowners to make decisions based on clarity rather than uncertainty. With proper guidance, your mortgage strategy can support both your immediate needs and long-term financial health, no matter how the markets shift.

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