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  • Writer's pictureNeil Joseph

Timing the Market: Stick with Variable Rate or Switch to Fixed Rate?


Stick with Variable Rate or Switch to Fixed Rate?

Dear Readers,


As your trusted mortgage advisor, I want to discuss a crucial matter regarding your current mortgage situation, particularly if you have continued to hold on to a variable rate mortgage. Let's delve into what's been happening in the market and what options you might consider.



In recent times, predictions about inflation, interest rate hikes, and economic trends have been inconsistent. As holders of variable rate mortgages, we've felt the impact of this uncertainty. Since March 2022, interest rates have been steadily climbing, prompting questions about whether they will continue to rise or if we might see cuts soon.


The last interest rate increase from the Bank of Canada was on July 12, 2023, and we've remained at these levels for over 200 days now. Initially, expectations of a weakening Canadian economy were anticipated by late 2023 or early 2024. However, recent GDP figures challenge this notion, leaving us uncertain about the Bank of Canada's stance on potential rate cuts.


Given these uncertainties, it's worth considering whether converting your variable rate mortgage to a fixed rate might offer some relief. While your current variable rate mortgage may exceed 6%, fixed rate options could be available in the range of 5.00% to 5.50%. However, it's essential to acknowledge the risk that rates could drop after making the switch, potentially resulting in unfortunate timing.


I encourage you to reach out to your lender to inquire about fixed-rate conversion options, as there are typically no penalties involved. Once you have the details, I'm here to help analyze the break-even levels and determine if switching makes sense based on your risk tolerance and financial needs.


To further assist you, I've prepared a video demonstrating how I conduct break-even analyses in situations like these.



Understanding that the future is unpredictable is key to navigating these decisions. While we can't predict future interest rate movements with certainty, we can analyze current trends to make informed choices that align with your long-term goals. I'm committed to providing the support and insights you need during these uncertain times.


Feel free to reach out to me at +1-647-904-5557 for assistance.

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