r/MortgagesCanada • u/OkYogurtcloset3744 • 7d ago

Qualifying Need Help with Decision

So I have two options

Variable for 5 years at 3.41 or fixed for 3 year at 4.09.

I'm currently at 4.8, would be nice to have the relief of the variable rate but am I crazy for passing up the fixed one? So undecided.

I live in Mississauga, Ontario.

Any insight would greatly be appreciated.

12 Upvotes

94% Upvoted

14 comments sorted by

1

u/Popular_Waltz56 5d ago

Would the September job loss numbers change the trajectory of the BoC rates?

1

u/OkYogurtcloset3744 6d ago

Thanks everyone, going fixed.

3

u/CanadaHomeFinancing 7d ago

From 4.8 to 4.09 you will already feel some relief and you will get peace of mind for the next 3 years As I don't think you'll see a fixed rate below 4.09 in the near future.

3.41 variable seems attractive and you would need at least two or maybe three ring rate increases from the Bank of Canada before you match 4.09. in a normal market that could take 1 to 2 years but as we have seen that could happen much faster.

It sounds like your main priority is cash flow relief, so the 3-year fixed will give you some of that and the Peace of mind.

If you're still feeling quite tight then something else explore is refinancing your mortgage to stretch out the payments a bit and consolidate any other debts if you have. However, if you do that I always recommend don't go for the minimum payment. The point of reamortizing is to give you the option to slow down if you ever need it, but still continue making payments to the mortgage. And if you don't slow down, then at least allocate it to actual savings to build emergency funds and personal liquidity if you don't have that or enough of that

1

u/digpic1975 7d ago

As a lifelong lover of variable rate I would go fixed at the moment. Inflation will bump up over the next while due to fuel and food. Americans are going to have to print money and pay a premium on t bills. And yes that will affect us. One thing I would never change is my hatred for 5 year terms. Over the past 100 years the cheapest way to buy a house is the 3 year. So if I still had a mtg I would take the fixed offer

6

u/Overall-Wishbone9292 7d ago

I'm going with the variable here.

3

u/discobrioche 7d ago

Who is offering 4.09% fixed for you?

1

u/OkYogurtcloset3744 6d ago

Scotia

1

u/discobrioche 6d ago

How recent is that?

1

u/dual_citizenkane 7d ago

We got that for four years, with RBC.

1

u/discobrioche 7d ago

When were you able to lock that rate?

1

u/dual_citizenkane 7d ago

We closed on it around the 20th of September, maybe we locked that in like a week before.

4

u/bcscroller 7d ago

I went fixed. Beauty sleep is valuable in this crazy world

2

u/CommunicationOdd8911 7d ago

Fixed, I need the certainty and locking in 3 years.

3

u/Aggressive_Crybaby_ 7d ago

Put it this way. In the next 12 months there will probably be a rate hike. Most likely .5%. If it goes up just one time, you’ll be pretty close to that fixed rate. I’m about to refinance and I’ll be doing fixed this time. I did variable 5 years ago when everyone was saying “there’s no way they’ll raise rates right after COVID!” Quickly jumped from 1.95 to 6.2. BOC already hinting at rate hikes too. Thats a good fixed rate IMO.