After the recent Bank of Canada prime rate cut to 3.45%, I've been getting a ton of inquiries whether it is time to lock into a fixed rate term, or continue to go with variable rates? As wishy-washy as this statement seems, it depends, as what might be right for some borrowers certainly might be right for others. \
If you are a first time buyer purchasing a home near the top of your budget, go with a fixed rate (this is a no-brainer). Rates are near all time historical lows, and having the security of knowing what your payment will be for the next 5 years will give you the certainly you need to properly budget.
If you have an investment property, fix your rates. Buying an investment property is not buying a house, rather it is buying a math problem. If your rate (and hence your payment) are fixed, it becomes much easier to evaluate the economic potential of that investment.
If you are thinking of selling at some point in the next 5 years, and are potentially comfortable with your payment fluctuating, go variable. Over the long term, going with a variable rate mortgage will save you money in most cases. The other benefit, which many don't consider, is that the penalty to break the contract is capped at a straight 3 month interest penalty, instead of the confusing (and significantly more expensive) interest rate differential penalty (especially if your mortgage is with one of the major banks).
With nearly 25 years of experience, I've been through this type of market turbulation before and can help give you the perspective you need to make a decision that works well for you and your family. Call (613)394-5810 or send us a message at any time!