Mortgage rundown: Variable-rate borrowers get a short reprieve

If your mortgage floats with prime rate, the Bank of Canada just bought you another 35 to 77 days of rock-bottom interest costs.

As this is being written, bond traders are pricing in a 90-per-cent chance of a hike on March 2. Yes, those same traders were wrong this time, but timing markets isn’t a perfect science. They won’t be wrong for long.High inflation is a fire that burns hotter if you wait to put it out. Deferring Canada’s first hike could require more and/or accelerated rate hikes, to bring inflation back to the central bank’s 2-per-cent target.

Mortgage Rundown: Warning signs that you picked the wrong broker. Plus, both fixed and variable rates are on the rise Jim Tourloukis, president of Verico Advent Mortgage Services, is one of those people. There are usually just two cases where a borrower should lean toward a five-year fixed, he said.

Nine gradual rate increases by .25% over the next five years on a variable rate mortgage is still less effective interest then signing up for a higher five year fixed mortgage rate today. A fixed rate will never go down, but a variable rate will eventually.

With Variable Rate mortgages outpacing Fixed Rates for 5 months in a row the impact of increases is broader than generally believed.

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