# Fixed or Variable for a new mortgage today?



## rcourtna (Oct 24, 2009)

In the past I've read that, on average, variable rate mortgages end up being more attractive than fixed rate mortgages. This prompted me to switch my fixed mortgage to a variable one. This was before the financial crisis.

Looking back, I made the right decision at the time. My mortgage rate kept sliding and today it is at 1.5%. My secured line of credit is at 2.25%.

Now I have to make another decision. I'm going to run up my line of credit to $80K for home renovations. I'll then get a mortgage to pay it off. 

Now the impossible question. Assuming that rates are at an all-time low today, should I negotiate a fixed mortgage, or another variable one? What would you do?


----------



## osc (Oct 17, 2009)

Variable. The best rate right now is Prime - 0.25% (2.00%). If you wait a few months you'll most likely get lower than that (probably Prime - 0.50%).


----------



## firsttimehomebuyertips (Oct 3, 2009)

rcourtna,

Your line of credit is at 2.25% so why not keep the eventual $80K at that rate?
That way you can have a low variable rate and be able to pay off as much as you like. Without having to pay penalties.


----------



## Berubeland (Sep 6, 2009)

Can't you get variable rate and lock it in anytime? I think you have that option with variable rate mortgages.


----------



## Jon202 (Apr 14, 2009)

Berubeland said:


> Can't you get variable rate and lock it in anytime? I think you have that option with variable rate mortgages.


No, that would be an open VRM, whereas most are closed VRM's for 5 years.


----------



## Gregreid (Oct 26, 2009)

Can I ask who you have your prime + 0 % HELOC with? I thought TD was the last to increase their credit lines to prime +1% effective November.


----------



## Shayne (Apr 3, 2009)

Berubeland said:


> Can't you get variable rate and lock it in anytime? I think you have that option with variable rate mortgages.


Yes you can.


----------



## canadianbanks (Jun 5, 2009)

You are not asking the right question . The right question should be - Would you be able to afford your debt if/when interest rates go back to 6-7%?


----------

