What to know when switching your variable mortgage to a fixed rate

Variable mortgage rates are rising, which might have some homeowners wondering if they should convert to a fixed rate. But one expert it’s not a “foregone conclusion" that everyone should make the switch

But just because variable rates are moving higher, that doesn’t mean it’s a “foregone conclusion that everyone should be switching to fixed,” said James Laird, co-founder of rate comparison website RateHub.ca, in an interview.

A spring report from the Canada Mortgage and Housing Corporation said 53 per cent of Canadians opted for a variable-rate mortgage in the second half of last year, a substantial jump compared to the first half of 2021, when 34 per cent chose a variable rate. The report said while that trend continued into this year, it appears to have plateaued in the wake of rising interest rates.

For homeowners who are considering converting to a fixed rate from variable, the good news is there’s no penalty to do so. However, the homeowner must stick with their current lender and take the fixed rate that’s currently being offered.