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Does it make sense to combine a fixed and variable rate mortgage product?

March 15, 2011

Have a read of this article on PropertyWire Canada that discusses the fixed vs. variable rate mortgage debate. It references a recent Scotiabank article where they are promoting a “mortgage diversification” product which allows consumers to combine a fixed and variable rate mortgage, rather than just choosing one. Although many lenders have been offering this type of product for years, our answer to clients who have asked us about it has always been the same, “choosing this option is like betting on both teams at the hockey game; you can’t win!”

The argument still stands that a variable rate mortgage is typically the best way to go if:

· you are disciplined,

· want to pay down your mortgage faster; and

· you want to save thousands of dollars a year.

What do you think about mortgage diversification products? What are you thoughts about the fixed vs. variable debate? Would love to hear what you think, email your response at info@monstermortgage.ca and we’ll be glad to share them with other people shopping for a mortgage.