Quote:
Originally Posted by blankall
You have to keep in mind that banks employ people full time to come up with those rates. The people doing this are the best and brightest in their field with the access to the most info. Anyone telling you with certainty that they can predict whether variable or fixed is better in this situations is lying.
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It's true that you can't reliably predict where rates will go, but it's also important to remember that lenders aren't really setting the rates either. Variable rates are tied to the Bank of Canada policy rate and fixed rates are tied to bond yields (plus a risk premium). Both tend to move with one another, but not always. So because its bond investors who are effectively setting fixed-rate mortgage rates, other factors can come into it (e.g. what kinds of returns other assets are generating, how likely a recession is, etc.) that influence the fixed rates but that may not directly impact central bank rates. So there are times where fixed rate mortgages are available at lower rates than variable ones which can make them a more attractive prospect than they normally are.
Personally I just wish we had the US system. A 30-year fixed mortgage that you can renegotiate whenever you want would be pretty nice.