WHY YOU SHOULD (STILL) CONSIDER A VARIABLE RATE MORTGAGE
- johnathanmcquoid
- Jan 17
- 2 min read
Fixed and variable rates continue to behave very differently in today’s market — and the gap between them is once again wide enough that many borrowers are reconsidering variable rate options.
While fixed rates follow bond yields, variable rates follow the Bank of Canada’s Prime rate — and the two don’t always move together.
Here’s what you need to know 👇
📈 Fixed rates have been climbing
Fixed rates continue to rise because they are tied to Government of Canada bond yields, which have been trending upward.
Higher bond yields = higher fixed mortgage rates.
This has pushed many borrowers out of their comfort zone, especially those renewing this year.
📉 Variable rates have become more attractive again
While fixed rates are increasing, variable-rate discounts have widened.
Some lenders now offer significantly better pricing on variable mortgages than on fixed terms.
This renewed spread has made variable options appealing again — especially for borrowers who have:
✔️ stable income
✔️ a strong budget
✔️ tolerance for short-term fluctuations
💡 Why variable rates can save money long-term
Historically, variable rates have outperformed fixed rates more often than not over the long term.
Even though the past few years saw volatility, the current discounting has shifted the advantage back toward variable for many borrowers.
The key reason:
You start with a lower rate, and you benefit from rate drops if the Bank of Canada decreases Prime again.
⚠️ Variable rates are not for everyone
A variable mortgage requires comfort with the possibility of rate movement.
If you are nervous about payment increases or prefer certainty, a fixed rate may still be better for you.
That said —
We can monitor rates for you and notify you if the Bank of Canada begins raising Prime so you can switch to a fixed rate if needed.
This proactive strategy gives you flexibility and protection.
🔄 You can convert from variable to fixed anytime
One of the biggest advantages of a variable mortgage is that you can lock into a fixed rate at any time during your term.
This gives you:
✔️ the opportunity to benefit from lower variable rates now
✔️ the option to lock in if rates rise
Most banks will not monitor this for you — but we will.
💬 Final Thought
Variable rate mortgages are not one-size-fits-all — but with the renewed gap between fixed and variable rates, they are worth reconsidering.
If you want to explore whether a variable or fixed rate is best for your situation, message The Frontline Mortgage Group. We’ll run the numbers and help you choose the strategy that matches your risk tolerance and long-term goals. 💬