People are choosing Variables for these reasons:
- They expect the Bank of Canada isn’t done easing
- Floating rates are finally on par with fixed rates
- It’s therefore easier to qualify for variables, given how the government’s mortgage stress test calculation works
- Standard variable mortgages have prepayment penalties of just three months’ interest (fixed penalties often run more than four times that)
- Some people like that payments on adjustable-rate mortgages can drop (irrespective of the upside risk)
- Variable borrowers can lock into fixed rates anytime
- Numerous academic studies support floating rates
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