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Canadian Real Estate Buyers Opt For Fixed Terms After Variable Shock

February 1, 2023 | Posted by: Angela Robinson

Variable rate mortgages are falling out of favour as rates rise. Just 29.7% of new uninsured mortgage credit in October had variable interest terms. That’s down from the 40.1% in September, and the 60.1% when rates peaked in January 2022. Insured mortgages saw a similar fluctuation for variable rates. About 24.1% of new insured mortgage debt in October had variable costs. It’s down from September’s 34.1%, and the 39.3% during January’s peak.


In January, when the market share peaked uninsured variable rate mortgages averaged 1.45%, compared to 1.89% for the total of all mortgages. A similar shift occurred with insured loans. Variable loans averaged 5.53% interest in October, compared to 5.18%. Back in January, they averaged 1.51%, nearly 50 basis points lower than the total.


Traditionally, Canadian households opt for fixed term schedules. They cost a little more but reduce risk and provide peace of mind. It’s a responsible choice, but that isn’t what happened over the past two years. Low-rate stimulus drove a big discount for variable rate loans. The gap was amplified as central banks failed to keep up with the market. Such a discount was too good to pass up, but it may seem like a trap in hindsight.

If you are debating variable and fixed rates get in touch with us to help you make a more informed decision. Call 780 701 3888 or email

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