Fixed vs Variable: The Debate Is Heating Up
With yesterday’s rate drop, the gap between fixed and variable rates is tighter than it has been in years. Many homeowners and first-time buyers are pausing and asking the same question: Is now the time to consider a variable-rate mortgage again? The answer is: maybe — but it depends entirely on your financial comfort level and long-term plans. Fixed and variable each come with benefits, limitations, and risks. Understanding how they align with your goals is the key to choosing the right path.
What a Fixed Rate Offers
A fixed rate provides payment stability and predictability. Your rate stays the same for the entire term, which means no surprises and no fluctuations. Fixed mortgages are ideal for anyone who prefers a set monthly budget or who would find payment increases stressful or difficult to manage.
What a Variable Rate Offers
Variable-rate mortgages typically come with lower penalties and can offer more flexibility. If the Bank of Canada cuts rates again before year-end, variable-rate borrowers may see savings sooner than fixed-rate borrowers. However, variable rates come with uncertainty. Payments or amortization may change depending on product type and lender policy. They can be a powerful tool—but they’re not for everyone.
Key Questions I Ask Clients
To help determine the right fit, I walk clients through several important considerations:
• Are you comfortable with some unpredictability? Would a payment increase be manageable?
• Do you have savings or an emergency buffer?
• Are you planning to move or refinance within the next three to five years?
• Could you tolerate a 30% payment increase? What about 50%?
• How secure is your income over the next few years?
• Are you someone who prefers “set it and forget it,” or do you actively monitor economic updates?
Your responses help shape a mortgage plan that fits your lifestyle, not someone else’s advice or assumptions.
There Is No One-Size-Fits-All Answer
The best rate is the one that aligns with your risk tolerance, financial goals, and future plans. Rates may shift again, and the Bank of Canada is unpredictable. That’s why strategy matters just as much as the rate itself. Whether rates hold or drop again, your mortgage shouldn’t feel like a gamble. The right structure offers peace of mind in all market conditions.
Let’s Build a Strategy That Works for You
If you’re unsure whether fixed or variable is right for your situation, you don’t need to figure it out alone. Let’s review your goals, your timeline, and your comfort level so you can choose a mortgage that supports your life—not one that keeps you up at night.
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📧 leanne@mymortgagestrategy.ca
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