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What to do, what to see? In Port Alberni, BC

Fixed vs Variable Rate Mortgage??

Posted on Jul 24, 2012 in Mortgage Market Updates and News

Interesting chart. It's nice to see the gradual decrease in interest rates overall. As you can see Fixed interest rates have always been slightly higher than Variable. If this chart showed the past two years, you'd see the two lines get closer together than normal. 

Over the past two years, variable rate mortgages have slowly become less attractive as we've seen fixed rate mortgages drop to historical lows. If this charge showed where we're at currently, you'd see Variable mortgage interest rates at about 2.8% while fixed mortgage interest rates were at about 3%. A very small spread.

It seems to me it's a great time for a fixed rate mortgage compared with a variable. Typically when prime rate shifts, it shifts at least .25%. Although we never know what's going to happen, it's highly unlikely prime rate will drop any further than it already is, so the saying says, there's no where to go but up. If you're looking at signing up for a 5 year variable rate mortgage, make sure you're aware that with one shift of prime, you'll likely be paying more than you would be on a comparable fixed rate mortgage. Normally the spread between variable and fixed rates is about a percent ore more, which has made variables' an attractive option. But with rates as close as they currently are, it's nice to be able to take advantage of a great low rate with a  fixed, as well as having the security of knowing what your mortgage payment will be for the next 5 years.

These rates also bring along a great opportunity to refinance. Many people are realizing the ability to pay a mortgage penalty and switch lenders for a more competitive rate, and still save money even after the penalty. Call Sharie Marie, Mortgage Professional with TMG The Mortgage Group Canada today to see if this is an option for you.


I'm looking forward to connecting. Due to being in and out of meetings both for council and business, email is typically the best way to get in touch with me. If you prefer to call, that's fine as well, it just may take me slightly longer to get back to you. Texting is also welcomed.
  • TMG - The Mortgage Group Canada Inc.
    4201 Johnston Road, Port Alberni, BC, V9Y 5R2
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