Based on research done by Moshe Milevsky, associated professor of finance at the Schulich School of Business at York University, holders of variable rate mortgages came out ahead of fixed rate holders 90.1% of the time. The study was based on mortgages granted between 1965 and 2007. The resulting savings from the variable rate mortgages allowed borrowers to pay off their mortgage between 8 and 19 months sooner.
While it may be true that the odds favor variable rate holders, 70% of Canadian still opt for a fixed rate mortgage. To many, there is nothing like the certainty of knowing exactly how much you need to pay each month.
To learn more, click here to read the April 2, 2008 article of the Vancouver Sun.
