With interest rates beginning to ascend, is it better to lock in a mortgage at fixed rate or opt for variable rate?

Question

With the interest rates beginning to ascend, is it better to lock the house mortgage at a fixed rate or to opt for a variable rate mortgage? Thanks in advance for the sage advice that is shared here.

Answer 1

As always, it depends.

Variable rates, over the long haul are almost always lower; and result in an overall faster repayment.

In any specific timespan, however, it is generally possible to pick a point where a smart lock-in would have been a better decision, but these points are only apparent in retrospect.

Given the current rate climate, where there seems to be a general consensus that rates will rise, a lock-in would seem prudent. But that will only really be proven several years from now.

My tip on this, like most other investing advise, is "do what you need to do so that you can sleep at night".

If you want or need some sense of security, then by all means, lock in. If you want the absolute lowest rate, and have some room to maneuver in your finances, you might be willing to take the risk.