Fixed and Variable rates...what next?

The spread (or difference) between fixed and variable rates hasn't been much as of late. With 5 year fixed rates recently rising above 3% and 5 year variable rates hovering around 2.60% (prime 3.00% minus 0.40%), most consumers have been choosing fixed rates.

And that is no surprise. Since the Bank of Canada's prime rate has been so low, the variable rate hasn't been as enticing as it was back in the day (i.e., 2011) at Prime minus .90% (or more!)

What we will need to see happen before the variable becomes more appealing, is for the 5-year yield (which leads fixed rates) continue to increase. We expect fixed rates to inch up over the summer as they yields they are tied to increased by half a percent last month alone.