Bond Yields Cracked Below A Key Level This Past Week. Here’S What It Means For Choosing A Mortgage

Bond yields cracked below a key level this past week. Here’s what it means for choosing a mortgage
Globe and Mail ~ March 6th, 2019

Choosing between a fixed- or floating-rate mortgage never boils down to just one thing. But when the rate difference between the two is tiny, people often make it that way.

As the spread between fixed and variable rates shrinks, fixed mortgages seem cheaper relative to variables and can appear too good to pass up.

People figure, “Why risk a spike in prime rate when you can take a cheap five-year fixed and guarantee your interest costs for half a decade?”

But the fixed-variable spread is all too easy to misinterpret. If history is a guide, placing too much emphasis on it may very well cost you.

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