Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
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The first question most asks after the mortgage rate is fixed or variable. The most important and most difficult question. Everyone who has this question in mind, knows that the answer to this rests in their own financial plan and ability to handle risks.

Remember that it is very difficult to predict the market. No one, including me, would be able to tell that in coming five years if a variable or fixed rate mortgage will be the winner.

I have written a very short article on fixed vs variable mortgage a while ago. At this time all I can do is to direct you towards ideas so you can take the right decision.

Google is your friend while looking for an acceptable answer to this question. A number of news articles, blog postings covers this issue nicely. There are number of studies done on this subject – as this is one of the most popular question in North America.

Here, I have some of my all time favorite articles covering the question of fixed vs variable rate mortgage.

News papers

  1. Variable or fixed? Both options have merit
  2. Fixed or variable mortgage? That is the question
  3. Variable versus fixed: What makes sense?

Blogs

  1. I.D.E.A.S. For Choosing Between A Fixed And Variable Rate
  2. Bucking the conventional wisdom on a fixed-rate mortgage
  3. Variable or Fixed Mortgage?

Study (if you are mathematically oriented)

  1. Moving mortgages – Moshe A. Milevsky
  2. Fixed and Variable-Rate Mortgages, Business Cycles and Monetary Policy

RBC – I was not sure where to add this..

After reading all these, if you get some more time then I have something to add to all these. Four historical charts.

  • One is comparing bank prime rate and BOC posted 5 years fixed rate.
  • Another is comparing bank prime rate reduced by 1% and BOC posted 5 years fixed rate reduced by 1.75%.
  • Third one compares bank prime rate and BOC posted 5 years fixed rate reduced by 1.75%.
  • Last chart is comparing bank prime rate reduced by 1% and BOC posted 5 years fixed rate.

By posting these charts I am not suggesting anything. It is up to you to analyze and decide what you want to do. After all these reading it should be easy to find out.

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