With Canada holding rates steady—policy rates near the low-2% range and prime rates in the mid-4%—many buyers are weighing the fixed versus variable mortgage decision. Over the last few weeks, I've watched fixed mortgage rates inch up as government bond yields climbed, while the central bank highlighted ongoing inflation risks. For those considering a variable rate, it's important to remember: a quarter-point increase on a variable mortgage means about $1,250 more in first-year interest for every $500,000 borrowed, even before amortization comes into play. This is why I always stress the value of payment stress-testing for my clients—it’s about making sure your next move fits your life, not just your budget.
Variable mortgages can offer more flexibility, especially with lower prepayment penalties if you think you might sell or refinance early. But keep in mind, fixed-payment variable loans usually mean more of your payment goes to interest when rates rise. No matter which path you’re considering, both require passing the same stress test: you’ll need to qualify at the higher of your contract rate plus two percent, or a floor rate in the low-5% range.
Over the past 22 years helping families in Quinte West and Niagara, I've learned that the right mortgage really depends on your plans, your risk comfort, and the life you're building. I’m always here to listen—and to help you weigh what matters most to you. Built on Trust. Driven by Results.
