For months, the assumption was that variable rate mortgages were just one or two rate cuts from being cheaper than fixed rate mortgages.

It turns out that a rate cut wasn’t even necessary: The lowest available five-year variable rate is already cheaper than fixed rates as of this month.

What happened? Fixed rate mortgages simply got more expensive.

Unlike variable mortgages, which follow the Bank of Canada’s headline interest rate for their pricing, fixed mortgage rates are largely based on the performance of bond yields.

The Canada five-year bond yield – the most influential bond on mortgage prices – has been hovering at elevated levels around 2.9 and 3 per cent for weeks, and that means fixed rates have slowly been ticking up.

Whether or not you should take a variable mortgage is

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