Not at all! Whether to go fixed for variable really depends on the person, and there is no right or wrong answer here. In the past, homeowners have typically come out ahead with variable rate mortgages over fixed, but this doesn't necessarily mean that variable is always the way to go.
When choosing between fixed and variable, one borrower may not feel comfortable with any sort of risk at all while another may have a very high risk tolerance. Your choice really comes down to where on the spectrum you fall, and your mortgage professional should take the time to discuss this with you. Sometimes I’ll suggest for a client to go fixed, but then I may suggest variable to the very next client I speak with. Just because a specific mortgage is right for one person doesn’t mean it’s right for another. If you aren’t comfortable with the fact that your rate and payment could increase at any time, then a variable rate mortgage probably isn’t for you, regardless of how big the spread is.
There is one additional benefit to variable over fixed. If you found yourself in a position where you needed to break your mortgage early, then the penalty may be lower… in some cases, substantially lower.
The Bank of Canada has increased their overnight rate twice this year (which is what prime rate is based on). These were the first increases in almost 7 years. There are predictions that there could be one more before the year is out. Last time we saw rate increases back in 2010, we saw the prime rate increase three times in as many announcements. But then we didn't see another increase for the next 7 years. It's possible it could increase one more time. I don't think we'll see it, but time will tell. Whether this happens or not is speculation... but considering how strong the predictions are that it will increase, it's something that you need to be prepared for and factor into your decision.
Anything can happen and there is nothing to say however that the rate won't start to settle back down later in 2018... or it could flat line like it did last time. These fluctuations are to be expected when taking a variable rate mortgage and is something you would need to feel comfortable with.
Hope you find this helpful.
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