Variable or fixed rate? There are compelling reasons for both sides of the conversation. Most research supports the notion that variable rates will get you farther ahead in the long term, however, the figures generally only consider the benefit from a rate point of view.
It is important to match product with person, as looking at straight rate scenarios does not always meet all of the clients needs or goals, namely how comfortable are they with the risk? For first time home buyers a fixed rate mortgage helps them qualify for more house. With a variable rate they must qualify at the Bank of Canada qualifying rate, in most cases, allowing them to purchase on average 30% less house. Even with the interest rate differential payout penalty that comes with a fixed rate mortgage, should it need to be discharged before the maturity date, the cost of security is more attractive than with a variable rate product.
It is important to collect as much information as possible to make the best, most appropriate, decision. Each option needs to be managed properly so you are optimizing your mortgage product.