Mortgage Experts Now Say 4-Year Fixed

Real Estate Weekly
November 8, 2011

Mortgage broker Peter Majthenyi put his foot down when he was quoted in a recent Globe and Mail article as saying, "Today, I just cannot in good conscience put a borrower into a 3-per-cent variable when for the same rate I can put them in a four-year fixed."

Rob McLister, the mortgage broker behind, agrees. He looked as several scenarios and concluded that the best mortgage right now is a four-year fixed mortgage around three per cent, if you can find one.

When interest rates hit their historic lows, a large gulf opened between fixed and variable-rate mortgages, as this graph from CanEquity shows. (Click here to link to the interactive version on their website.)

Fixed vs variable mortgage 10 year graph from CanEquity

Now the gulf has narrowed almost to nothing as banks, followed by other lenders, have protected their profit margins by increasing variable rates. A few holdouts among the non-bank lenders are still offering attractive floating rates, so if you're mortgage hunting find a mortgage broker to help you.

"Variable or fixed? It's no contest" Globe and Mail

"Globe: Variable Rates Are 'So Over'"

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