Fixed or Variable-Rate Mortgage… the analysis.

[jason]

I’ve been searching for information on mortgages, particularly wondering if fixed or variable mortgages were better for me. A lot of sites referenced Mortgage Financing: Floating Your Way to Prosperity (2001) which is from the Individual Finance and Insurance Decisions Centre. This turns out to be at University of Toronto, so I searched about and found two more recent papers: Mortgage Financing: Should You Still Float? Four Answers (2004) and Mortgage Financing 2007:
What Now?. I’m going through all three papers, but the basic consensus is that it is cheaper the vast majority of the time to go with a variable rate (the first article says 88% of the time, and it is very analytic). I don’t mind doing what people say, but I have to understand it… as much as I can.

Comments

[perpetualstroll.livejournal.com]

Are you gearing up for a home purchase?

I've been on a variable rate for the last 3 years and am renewing it on variable with the option to go fixed at any time. I figure if there's some kind of crazy meltdown there will be some kind of warning, at which point I can lock it down. :P

[complicittheory.livejournal.com]

I've been on a fixed for 3 years, and planning on going variable :) with an option to fix :)