Monday, August 2, 2021 07:17

Is the Variable Rate Mortgage a good option?

After the recent fixed rate increases, I have had a few clients asking me if variable rate is a good option.

The Bank of Canada indicated in their last announcement that interest rates’, meaning their bank overnight rate, which affects prime, is not going to increasing in the near future.  Saying this they do caution once interest rates move, it will be an upward trend.   The word in the industry is that the prime overdraft rate which effects the variable rate, which is currently at 3%, will not increase until middle to the end of next year, maybe they will wait until 2015.

As long as the economic outlook looks positive fixed rates will continue to rise. Bad news in the economy is usually good news for fixed interest rates.

Whether variable is a good option for you or not, depends on your risk tolerance, your budget, and whether or not you can handle higher mortgage payments.