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Should You Go Fixed or Variable on Your Mortgage in Toronto?

By Advice For Buyers

Let’s talk about one of the biggest questions plaguing buyers (right after “Do we really need a powder room on the main floor?”): fixed or variable mortgage?

It’s not just a financial decision—it’s emotional. It’s about your risk tolerance, your long-term goals, and what kind of sleep you want at night. And in Canada’s current rate environment, it’s more relevant than ever.

The Basics: What’s the Difference?

Let’s start with the basics.

A fixed-rate mortgage locks in your interest rate for the entire term. You get predictability. Your payment doesn’t change, which makes budgeting a breeze. Whether rates skyrocket or sink, your monthly payment stays the same.

A variable-rate mortgage fluctuates with the lender’s prime rate, which is tied to the Bank of Canada’s overnight rate. That means your interest costs—and sometimes your payment—can rise or fall during the term. Some lenders offer variable products with fixed payments, where more or less goes toward the principal depending on rates.

What’s Happening in 2025?

As of spring 2025, the Bank of Canada has already started trimming rates after a prolonged tightening cycle. Inflation has cooled somewhat, and there’s widespread speculation that rates will ease further into 2026.

That’s got many Canadians thinking: should I ride the wave down with a variable rate, or lock in now just in case we’re in for more surprises?

When Fixed Rates Make Sense

Choose a fixed rate if:

  • You’re risk-averse and don’t want to gamble with future payments.

  • You’re stretching your budget and can’t afford payment fluctuations.

  • You expect interest rates to rise again, or at least stay high.

  • You need certainty—say, you’re buying your first home and just want one less thing to worry about.

Fixed is the vanilla ice cream of mortgages. Safe, stable, and not likely to ruin your day.

When Variable Rates Might Be the Smart Play

Consider a variable if:

  • You have room in your budget and can handle short-term bumps.

  • You believe rates will drop over the next 12–24 months.

  • You want to take advantage of prepayment privileges (variable mortgages often come with lower penalties).

  • You’re planning to sell or refinance in the near future and don’t want to get dinged with steep fixed-rate penalties.

Some of the savviest investors and seasoned buyers opt for variable—but they’re also the types who read Bank of Canada statements like bedtime stories.

Reality Check: What About Hybrid Mortgages?

If you’re feeling indecisive (no shame!), you could split the difference. Some lenders offer hybrid mortgages, where part of your loan is fixed and part is variable. It’s a bit more complex, but could offer a best-of-both-worlds solution for buyers with one foot in each camp.

Mortgage Strategy Should Match Your Life Strategy

Maybe you’re a new homeowner with tight margins. Maybe you’re upgrading and renting out your old condo. Maybe you’re a serial mover chasing the next hot neighbourhood. Your mortgage should match your life—not just market forecasts.

Here’s the truth: both fixed and variable rates can be the “right choice” depending on your situation.

What We’re Telling Clients in Toronto

Right now, many of our buyers are leaning toward shorter-term fixed mortgages—think 1 to 3 years. That way, they lock in predictability but keep the door open to refinance if rates drop.

Others are sticking with variable rates with the confidence that they’ll see savings over the next few years—especially if they’re not planning to break the mortgage early.

The key? Talk to a mortgage broker you trust. Get the real numbers, not just the sales pitch. We’ve worked with some excellent brokers across Toronto, and we’re happy to introduce you.

Final Thought

Listen, the decision between fixed and variable isn’t just about the math—it’s about peace of mind. Don’t pick the product that looks smartest on paper. Pick the one that lets you sleep well and move forward confidently.

Want help running the numbers or connecting with a great mortgage pro? Reach out to us here and we’ll guide you every step of the way.

Toronto Real Estate Market Report – November 2020

By Monthly Market Updates

 

According to the calendar… this year is almost over. According to November’s market numbers, the craziness continues!

The Toronto Real Estate Market saw a drop in new listings, active listings and overall sales. It also took about 4 days longer (28 versus 24 days) for homes to sell in the city. But between a mid-month lockdown and the seasonality of the year – this didn’t really come as a big surprise. 

Average Price

The average price of a home in the city increased by 13% when compared to the same time last year, bringing us to an average price of $955,615. And for those keeping score… that’s a $116,000 increase since January of this year (not bad during a pandemic).

 

Every segment of the market saw a drop in sales for November. The detached market had the biggest decline with a 24% drop month over month. However on an annual basis, both detached and semi-detached saw great gains with an 18% and 36% increase for each. Price increases were also the strongest for these two segments up over 8.5% for each. 

Condo Activity

2020 was definitely NOT the year of the condo!  In November, sales were down by more than 4% month over month – and nearly unchanged year over year. Prices followed the same trend – down by 4% month over month and nearly 3% year over year (nearly $20,000 less than the same time last year).

… but it is in the condo market that we see the biggest opportunity. With prices down and supply up, buyers, especially in the downtown core, these next few months offer one of the greatest times to get into the market. A quick MLS search for 1 bedroom condos south of Bloor brought up nearly 150 listings – this time last year, that was practically unheard of!

Three Trends To Watch

  1. We’re optimistically hoping that vaccines and the current lockdown help bring down COVID-19 case numbers in the months ahead and a return to a new normal.
  2. New by-laws for AirBnB operators will be enforced in early 2021 – will this impact supplies in the condo market further
  3. Will those that left the city due to COVID-19 make it through a northern winter? And will that impact demand in 2021?

 

DETACHED HOUSES

993 sales took place
295 fewer homes than the previous month (24% decrease in sales)
145 more homes than the previous year (18% increase in sales)
The average price of a detached home was $1,477,226
An increase of $6,369 compared to the previous month (0.4% increase in price)
An increase of $116,980 compared to last year (8.6% increase in price)

 

SEMI-DETACHED HOUSES

336 sales took place

80 fewer homes than the previous month (19% decrease in sales)

89 more than the last year (36% increase in sales)

The average price was $1,160,911

An increase of $6,824 compared to the previous month (.59% increase in price)

An increase of $93,884 compared to last year (8.8% increase in price)

 

TOWNHOUSES

362 sales took place

47 fewer homes than the previous month (11.5% decrease in sales)

68 more homes than the previous year (23.13% increase in sales)

The average price was $819,752

decrease of $8,338 compared to the previous month (1% decrease in price)

An increase of $56,454 compared to the previous year (7.4% increase in price)

 

CONDOS

1,375 sales took place

63 fewer condos than the previous month 4.4% decrease in sales)

more condos than the previous year (.5% increase in sales)

The average price was $640,208

decrease of $27,953 compared to the previous month (4.2% decrease in price)

decrease of $19,647 compared to the previous year (3% decrease in price)