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Canada mortgage: Should you get variable or fixed-rate?


With the Bank of Canada raising its policy interest rate through 2023, experts expect the gap between fixed and variable mortgage rates to shrink. If you’re in the market for a mortgage, here’s some advice on what to consider when deciding which type to opt for.


Variable-rate mortgages have an interest rate that can fluctuate in relation to the Bank of Canada’s overnight rate. Fixed-rate mortgages, which are priced based on bond yields, see borrowers pay the same interest rate throughout the term of their loan.


“The gap really varies [based on] the economic cycle, so it’s not surprising that at some points it narrows, and then at some points it widens,” Royal Bank of Canada senior economist Robert Hogue told CTVNews.ca in a telephone interview on Tuesday. “Just a year-and-a-half or two years ago, both the variable and five-year fixed [rates] were about…

Read more at www.ctvnews.ca

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