Is now the time to lock in your mortgage? No, not yet, mortgage broker David Larock maintains.
Traditionally, a five-year fixed-rate mortgage has been about 1.5 percentage points higher than the five-year variable rate, depending on the prevailing
yield curve. Today, you can get a five-year fixed mortgage for much
less than that.
Fixed-rate mortgages have traditionally been popular among first-time
buyers looking for predictability in their payments. But the Bank of
Canada's recent decision to stand firm on rates is likely
going to keep variable-rate mortgages attractive for some
Larock says he’s able to offer his clients five-year variable-rate
mortgages at prime minus 0.4 percentage points, or 2.6 per cent. Five-year fixed-rate mortgages can be had for 2.99 per cent, he says.
Most studies says that variable-rate mortgages have worked out to be
better than fixed-rate mortgages over the past 25 years. And the
difference was fairly dramatic, saving consumers thousands in potential
interest costs. But is this likely to be the case going forward?
Yes, says Larock.