Variable vs Fixed rate Mortgage

[Rami Sobhani]

In Canada how can I determine what would be a better type mortgage a variable or fixed rate up to 5 years? What are you recommendations for different situations.

[Caroline Gerardo]

If you plan to keep for a year go variable and lowest cost. If you plan to keep more than four years there is only a tiny shade different in payment  for a fixed rate loan.

[Jon Puente]

Hey Rami,

In this market, it would absolutely make sense to go Variable.  Rates "should" come down in the next 24 months, so as long as you plan to refi sooner rather than later, then you would be good.  

I have ran the math many times, and there really isn't any benefit to doing a 7yr ARM or 10yr ARM.

Great Question!

[Frank Greg]

@Rami Sobhani:

In Canada how can I determine what would be a better type mortgage a variable or fixed rate up to 5 years? What are you recommendations for different situations.

Either has its risk in the current environment.

[Andrew Postell]

@Rami Sobhani I feel the right thing to say here is "what are you prequalified for"?  Meaning, maybe you cannot even qualify for a variable interest rate because of X reason....or maybe you cannot even qualify for a fixed rate because of X reason.  There are lots of different loans out there.  Sometimes the property you are seeking might only qualify for a 15 year, adjustable rate mortgage.  So I think the right thing here is to seek out a lender that will help you with what you are trying to accomplish first. 

Hope all of that makes sense.