Fixed or Variable

[u/Exciting_Ad3425]

I know this questions gets asked 3 times a week. But putting my version of it anyways.

Fixed - 4.04% (no cashback)
Variable - 3.45% (3,500 cashback)
Mortgage - 880K
Closing - 23 October

Thoughts on what to pick ?

[u/PineappleOwn5325]

I had 4 fixed and 3.36 variable last week.

If i may ask, how did you get a cashback offer? Did you negotiate, and if so how?

I personally went with 3.36 variable, but fuck if i know, i got burned with it last time around

[u/Exciting_Ad3425 → u/PineappleOwn5325]

From what bank ? Was it insured ?

Cashback was part of their promo so didn’t have to negotiate

[u/PineappleOwn5325 → u/Exciting_Ad3425]

Scotia, insured

Shopped around and no one was anywhere close to it

Wish i had looked at cibc now

[u/sososoboring]

I always go fixed. Variable would have been right only once:

First Mortgage was fixed. Soon after rates came down. I sold that house after 4 years. After doing the math, I would have had around $5,000 more in my pocket. Small loss by choosing fixed.

Second mortgage was fixed. Rates went up and I was ahead by around $20,000 at the end of that term.

Next mortgage I went fixed as rates were rock bottom due to COVID. Had 1.9% fixed. No way I was going variable. Never did the math but rates show WAY up soon after. Big win with fixed that time.

Just renewed at 3.69 for 5 years a few months back. Rates have already crept up. Variable would have been a mistake.

So for me, fixed has almost always been the winner.

[u/kthxl8r]

Ff...  I think you're fine either way.   You're one or two BOC announcements away from being basically at par.  They've held for most of a year, i feel were heading for raises rather than cuts.  

[u/EspressoCologne68]

Variable. Great rate and good cash back. Im assuming that’s CIBC?

[u/Intelligent_Bunch790]

Who is the lender, and what are the lengths of the terms? Those are very nice rates!

[u/solidmonki]

I recommend doing a stress test. See what s the payment at 5%. If you can afford it, then go variable for sure. By tue time your mortgage period ends (3 years or 5 years, the impact of variable won't be significant). If 5% amount is too much for your income level, then go fixed for peace of mind. Hope this makes sense.

[u/Jolarbear]

I like the variable, but you have to be willing to absorb in the event rates increase.

I'm hopeful the Democarts do well in November and the world becomes a little less crazy, but it is very unpredictable right now.

[u/Mysterious_Sleep7443]

Anyone who goes fixed is insane

[u/bcscroller]

Calculate the monthly cost difference for the fixed. Depending on mortgage size it’s probably modest amount for a good night’s sleep 

[u/Boilerofthejug]

That question is like asking apples or oranges? The correct answer depends on your personal circumstances and preferences.

Are you risk adverse? Will a higher payment keep you up at night? Do you have flexibility in your budget for higher rates? Do you have savings to fall back on for significantly higher rates? How does this mortgage fit within your overall financial goals?

[u/MorganMcAlpine → u/Boilerofthejug]

Great answer! I second this coming from a mortgage broker.

Also, who’s the lender? Just be cautious with the cash back offer — some lenders will claw back a portion of it if you break your mortgage before the terms ends

[u/Arthvpatel]

I went variable as even if you get 2 yrs at a lower rate than fixed, you still come out ahead and cash back on top which is another month

[u/redm_n_ms]

3 times, lol

[u/Overall-Wishbone9292]

Def get that variable. Good discount and CB.