Variable rate mortgages haven’t looked this attractive in years.
That’s not to say they’re the right choice for people buying a home or renewing a mortgage. If you have some financial stress in your life already, a fixed-rate mortgage is a better choice. But if you want to lock down a very low rate today and are OK with the idea that it could rise in the months and years ahead, then consider the variable rate.
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I wrote a column talking about the benefits of variable-rate mortgages in late March. One of my arguments was that the penalties for breaking them are typically much less than for fixed-rate mortgages, while the other was that they’re cheaper than the fixed option. Since then, fixed-rate mortgages have become an even better deal. According to Ratehub.ca, the differential between the best fixed and variable mortgage rates recently hit 1.04 per cent, which is the largest gap since Dec. 1, 2011.