16 Jul The decision on debt: What’s the right mortgage?

Variables at play with recent rule changes and coming hikes

For some weeks now, Bank of Canada governor Mark Carney, Finance Minister Jim Flaherty and most of the major Canadian banks have been warning that the record low interest rates of the past several years are over, and that a hike – perhaps even several – is on the horizon. At the same time, the banks have been offering truly incredible deals on longterm fixed rate mortgages, some of them barely higher than prime.

So all of this leaves the variable-rate mortgage holder with the inevitable question: Is it time to lock in from a variable to a fixed rate? Well, as it turns out, the answer is a indisputable, unequivocal – maybe.

For every expert who says that absolutely, you should lock in now while rates are still low, there’s another who argues just as confidently that rates are likely to stay put at least till the end of the year, and only a fool would give up a great variable. Here’s the essential case both in favour and against locking in; only you can decide which argument feels right to you.

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