The Experts (and so called Experts) have varying opinions on locking in a mortgage to a fixed period, or "running" with the variable rate. A couple of these assumptions include:
- Rates will remain relatively stable, with any major interest rate fluctuation severely affecting not only the housing market, but the economy - which is still somewhat fragile.
- Fixed rates - like the 5 year rate - offer stability to a household. In turn, that stability provides some reassurance to the housing market, and that sector of the economy.
... ... mortgage planner David Larock says the BMO study “sounds like another chapter in the age-old fixed versus variable debate – and the banks have largely been saying that fixed rates are the way to go for years now, even in the face of considerable evidence to the contrary.
“I am always a little cynical of this stock advice when given by the banks because their fixed-rate mortgages are much more profitable, and convenient, because advising borrowers to take the more conservative path is easily defensible, even if it proves more expensive over time,”