BMO Fixed Mortgage Report; Does Fixed Now Beat Variable?

On Thursday, March 13th, the Globe and Mail published an article discussing a recently released study from the Bank of Montreal regarding mortgages in Canada. The premise of the report was this claim:

Fixed rate mortgages now trump variable rate mortgages in Canada.

Allow us to reassure you – this is certainly not the case. Here’s why.

An oft-cited study by York University professor Moshe Milevsky determined that between the years of 1950 up until the year 2000, the variable rate mortgage would have served Canadians better 90% of the time when compared to a fixed rate mortgage. has long been a proponent of the variable rate mortgage in Canada as we have seen first-hand how the variable rate mortgage can save Canadians money through lower interest rates, increased flexibility and greater month-to-month cash flow. There are numerous ways in which home-owners can take the low rate of a variable rate mortgage, yet find the certainty that comes with a fixed rate mortgage too.

However; fewer interest payments, flexibility for home-owners and paid off mortgages don’t exactly add to profit margins when it comes to satisfying your shareholders. While no one can deny that fixed rate mortgages have their place and purpose in the Canadian mortgage market — some people like knowing exactly how much and for how long they’ll pay — to simply label ‘fixed rate mortgages better’ takes the choice out of the home-owner’s hands and simply pads bank profits. But don’t count on them to tell you that.

If you would like to read the Globe and Mail article, you can find it here.

If you would like to read the Bank of Montreal report, you can find it here.

As always, we ask that you find out the facts for yourself, and simply that you be loyal to yourself first.

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We wanted to let you know of our very good experiences working with Surendra Wankhede as our mortgage consultant. He has negotiated 2 mortgages for my husband and me and one for our son during his recent condo purchase. We are most appreciative of his very timely responses to our questions and his attention to detail and his concern for what is good for us as customers. Additionally, we were working with very challenging buyers of our home and Surendra ensured that we had any information that…
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