Variable-rate still the cheaper mortgage option

The smart money’s long infatuation with the variable-rate mortgage has ended, perhaps a little hastily.

A lot of homeowners have saved a ton of money with variable-rate mortgages, where your borrowing cost floats with your lender’s prime lending rate. The prime rate is in turn guided by the Bank of Canada’s overnight rate, which was pounded lower in the financial crisis of 2007-09 and hasn’t rebounded. And yet, for reasons that may not be entirely sound, the popularity of the variable-rate mortgage is in decline.

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