With bond yields starting to settle back down again, we are now starting to see fixed mortgage rates settle back down once again. You can now get a 5 year fixed as low as 3.25% with full 20% prepayment privileges. Variables remain attractive as well with a 3 year as low as 2.45% (prime -0.55%) for a purchase or 2.50% (prime -0.50%) for a refinance or switch. The bank of canada is predicting that the prime rate will remain unchanged until sometime in 2015, but of course anything can happen. The spread between fixed and variable has no doubt increased for where it has been over the past couple of years, but it still sits under 1%, so I wouldn't exactly say going with variable is a 'slam dunk'. It really comes down to risk threshold of the borrower. A variable rate might be more suitable to one borrower while a fixed is better for the next.
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Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
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