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Make no mistake: The scales have tipped in favour of variable mortgage rates



The tide has turned in favor of variable mortgage rates in Canada. Recent trends show that variable rates, which can change with the market, are becoming more popular compared to fixed rates. This shift is largely due to the Bank of Canada’s recent pause on interest rate hikes, which suggests that future rate increases may be limited.


Financial experts point out that homeowners and buyers are seeing potential savings with variable rates. With fixed rates remaining high, the difference in monthly payments between fixed and variable rates is becoming more pronounced. Many Canadians are now considering variable rates to take advantage of the lower initial costs.


Another factor contributing to this shift is the potential for rates to drop in the future. While fixed rates lock in a single rate for the duration of the mortgage, variable rates can decrease if the market conditions improve. This prospect is appealing to those who believe that the peak of high-interest rates might be behind us.


However, opting for a variable rate is not without risks. Homeowners need to be prepared for possible rate increases, which could lead to higher monthly payments. It’s essential for borrowers to assess their financial stability and risk tolerance before making a decision. Despite these risks, the current market trends suggest that for many, variable rates are becoming an increasingly attractive option.


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