Would you take a variable-rate mortgage right now, or a fixed-rate mortgage?
I know, I know.
The answer everybody is likely to give is:
“It depends.”
But the truth is, there are two types of people who provide this answer:
1) Those who would take a variable-rate mortgage in certain situations, but take a fixed-rate mortgage in another, and thus would need to know more information about this hypothetical decision.
2) Those who have absolutely no idea, and rather than answering, “I don’t know,” would default to a lengthy pause, followed by, “It depends.”
Back in 2022, and maybe even 2023, all the talk was about interest rates. More specifically, the Bank of Canada policy rate and how much it was increasing.
In 2024, there was still a lot of talk about interest rates, but then it was about when rates would decrease and by how much.
One of the things that always bothered me about these discussions was the gleeful “doom and gloom” talk from people who seek chaos in the real estate market. You know the type. They’ve been predicting the “crash” since 2006, they hate all things real estate related, and they absolutely loved talking about the “mortgage renewal cliff.”
Remember that?
You may have forgotten, and for good reason, since it was so incredibly overblown.
Remember when real estate bears and media talking-heads were predicting that once the COVID-era mortgages came due, half the country would lose their houses?
It would be like 2008 in the United States!
Except, it wasn’t.
And it was never going to be.
We talked about this here on Toronto Realty Blog throughout 2023 and 2024, culminating in the revelation in 2025 that (gasp!) the whole thing was overblown.
March 27th, 2025, I wrote: “The Mortgage Renewal Cliff: Fact Or Fiction?”
To this day, I haven’t had a single client sell their home because they couldn’t afford their mortgage renewal.
It’s happened, no doubt. I’ve heard from my mortgage broker, I’ve heard from colleagues, and I’ve heard from a friend who works in debt consolidation.
But I haven’t seen it, and I think we can all agree that it hasn’t happened more than a fraction of what was predicted or discussed.
When I look at the media coverage of the mortgage market today, I find myself both amazed and confused at the variety of perspectives out there. Maybe “perspectives” isn’t the right word, but I hesitate to use the word “angle.” When it comes to media coverage of any given topic, I think we can all agree that different outlets take different viewpoints, slants, or angles, and target different types of readers. Much of this is inherent in the headline that’s chosen.
The way I see it, articles on mortgages these days fall into one of three buckets:
1) Informational & Instructional. Targeting those who want to learn, be informed, and keep up to date.
2) Educational & Entertaining. Targeting those who want to know what’s happening in the market, read up on case studies, and hear what people are doing.
3) Doom & Gloom. The ever-popular hate-on for all things real estate, targeting those who have always cheered for the market to crash, and for property owners to falter.
Let’s read through a few of the recent headlines, shall we?
Why don’t we start at the bottom with something from the “Doom & Gloom” bucket?
“Mortgage Risk Now The Number One Threat To Canada’s Financial System, With Defaults Predicted To Rise”
Toronto Star
April 16, 2026
This kind of reminds me of the “mortgage default cliff” days. It’s as though those at the Star want chaos in the market. I think it plays to their readership.
From the article:
Canada’s banking watchdog says mortgage risk is the number one threat to the financial system as more borrowers are expected to struggle to repay loans in a challenging economic environment.
On Tuesday, the Office of the Superintendent of Financial Institutions (OSFI) released its 2026-2027 annual risk outlook report, identifying the main potential pain points facing Canadian banks.
The regulator had ranked mortgage risk as the fourth biggest threat last year.
Now, with uncertainty stemming from the conflict in Iran and U.S. President Donald Trump’s trade war, OSFI predicts residential mortgage loan arrears or defaults will rise over the next two years.
I’m not suggesting that the content here is wrong, but rather I’m suggesting that this article (and the headline) goes out of its way to seek out negative content.
“Threat” is the keyword there. Throw in “number one,” and it sounds quite heavy.
“Defaults rising,” you say? This catches the eye of those who hate all things real estate.
Articles like this are always going to get eyes, but are they helpful in any way?
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Now, let’s go to an article that falls into the “Informational and Instructional” bucket:
“Nearly Half Of Canadian Borrowers Still Choosing Variable Rates”
Financial Post
April 16, 2026
From the article:
Leading mortgage rates held tight again this week, as markets watch oil prices like it’s a hostage situation.
Crude prices have been holding mortgage rates captive for a month and a half, due to the inflation ramifications.
The longer WTI oil stays near $100 per barrel, the worse inflation will be — and the higher fixed mortgage rates will likely be.
Yet, more than four in 10 Canadians are apparently unbothered by it all.
So far this month, 47.1 per cent of prime borrowers at Canada’s biggest mortgage originator and market proxy — Dominion Lending Centres Inc. — chose variable rates.
This feels like what we should be talking about here on TRB, right?
Not the destruction of capitalism or the financial ruin of greedy investors, but rather what’s actually happening right smack-dab in the middle of the mortgage market.
Variable versus fixed.
It’s a classic debate, and people will never get tired of discussing it.
I’m closing on a property on May 1st, and I chose a 3.69% variable-rate mortgage.
Am I wrong?
Should I have gone with the 3-year fixed? How about the 5-year fixed? How about the 10-year fixed?
Wait, nobody takes a 10-year mortgage! More on that later…
So what was my decision based on?
Well, for one, the variable rate is lower than any fixed rate, so that’s always a factor in the decision. Five-year fixed-rate mortgages are around 4.4% right now.
But more importantly, as far as my “bet” on the market or my best “prediction” is concerned, I don’t believe interest rates are going up any time soon, so why would I lock into a fixed rate?
I wouldn’t quite label this “gambling,” but there is a bit of an inherent gamble, and that’s why so many people choose the “safety and security” of fixed rates. They want a sure thing. They want a known entity. The idea of a floating interest rate, or something that could change overnight, scares the living daylight out of them. That’s what banks count on when doling out fixed rates.
What I’m not seeing reported in the mainstream media right now is what’s actually happening with fixed rates. Over the last six weeks, fixed rates have skyrocketed! And yet variable rates haven’t moved.
But how many articles are being written about variable versus fixed? The only one I’ve seen is the Financial Post article above.
Maybe it’s just not sexy enough?
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Alright, now let’s look at an article that I would drop into the “Educational and Entertaining” bucket, although this one is more educational than entertaining. Don’t worry, I’ll finish with one that’s more what I would call “entertainment” in the next section.
“Dear Ottawa: Canadians Need Reasonable 10-Year Mortgages”
Financial Post
April 17, 2026
Mortgage expert, Rob McLister, asks: “What if long-term payment security was possible, at reasonable interest rates?”
It’s a good question.
It might be the best question anybody has asked in quite some time.
From the article:
Canadian homeowners learned the hard way that five-year mortgage terms can turn a routine renewal into a household emergency.
That came after Canada’s benchmark prime rate nearly tripled from 2022-23 — the steepest proportional jump on record. And while most American borrowers shrugged off U.S. hikes, given their 30-year rate locks, Canadians absorbed the full impact.
For those who don’t already know, perhaps the biggest difference between the borrowing industries in Canada and the United States is the prevalence of Americans’ 30-year mortgage terms.
That sounds unfathomable to us, right? Because here in Canada, we fear that taking a longer-term means a larger “break fee” if and when we need out of the mortgage.
Imagine taking on a 30-year mortgage and then needing to sell your home three years later……and paying a twenty-seven-year break fee?
Don’t worry, that’s not how it works.
But here in Canada, if you lock into a five-year, fixed-rate mortgage and then decide to move to England for a new job, and thus need to sell your house or condo, you’re paying a break-fee based on how much term is left on that mortgage.
So what if it wasn’t that way? At least, in terms of very, very long-term mort
Rob McLister is the only one asking this question…
What if long-term payment security was possible, at reasonable interest rates?
Experts have talked about this idea for years because, in theory, it just makes sense. You want people to have economical options to manage interest rate risk. Every regulator in Canada would agree.
So why isn’t our government doing anything about it? One reason dominates: The leap from endless talk to actual action requires effort.
But almost nothing good in life is easy, so that’s no excuse.
It’s time to stop talking about it and push this initiative forward, Mr. Prime Minister, Mr. Housing Minister, Department of Finance, OSFI, Bank of Canada, CMHC and anyone else with a role to play.
Back in 2019, former Bank of Canada governor Stephen Poloz said in a speech, “As a policymaker, I see how longer-term mortgages can contribute to a safer financial system and more stable economy.”
Speaking to me today, Poloz conveyed the same. “I haven’t changed my mind about any of this,” he said. “American households enjoy a much more stable financial setting given their 30-year terms.”
Yet fewer than one in 100 Canadian borrowers choose 10-year terms — they simply cost too much.
And it’s a chicken-and-egg situation because we need lower funding costs to get more people interested. But we need more people interested to achieve lower funding costs.
Practically speaking, cheap 10-year mortgages are as long as we can hope for. Thirty-year funding costs too much in Canada, and most 30-year borrowers in the U.S. exit in an average of seven to nine years anyhow.
Rob McLister nailed it here, but how many people are reading? How many people care?
Those with subscriptions to the Financial Post, I’m sure. But the article above notes “fewer than one in 100 Canadian borrowers choose 10-year terms,” so I would suspect that very few people are actually reading this article, since it doesn’t apply to any of them.
Mr. McLister is five moves ahead on the chessboard here, and that’s the problem.
His line, “The leap from endless talk to actual action requires effort,” just about sums up all my thoughts on public policy, and unfortunately, our federal government is too busy to address something that could have major benefits to millions of Canadians. At a time when all we talk about is “affordability” and “the cost of living,” you would think an idea like this one could be made a priority.
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Last, but not least, here’s one that falls into the “educational and entertaining” bucket, but it’s more of the latter, in my opinion:
“More First-Time Homebuyers Rely On Parents To Co-Sign Mortgages Than Ever Before”
Globe & Mail
April 16, 2026
From the article:
With home prices vastly outpacing incomes over the past two decades, the number of first-time buyers who’ve tapped parents to co-sign mortgages has surged, a new analysis published by the Bank of Canada shows.
And while having parents on board dramatically boosted buyers’ purchasing power, there’s strong evidence that both generations are left at a higher risk of getting into financial trouble.
The share of first-time buyers under the age of 50 who co-signed mortgages with a parent jumped to roughly 11 per cent last year from 4 per cent in 2004, according to research by bank economist Shaoteng Li.
Why is it “entertaining?”
Because it’s got a little bit of a gossip element to it.
“Hey, did you hear that Becky’s mom co-signed her mortgage?”
Kind of feels like something you’d whisper to a friend at your locker in between third and fourth period.
The funny thing is, multiple media outlets picked up this story.
But the headlines all had different angles and ways of drawing in eyes.
The Globe & Mail article above made a basic statement: that more first-time homebuyers were relying on their parents to co-sign mortgages than ever before. That wasn’t editorialized at all.
The same can’t be said for this headline in Global News:
“Bank Of Mom And Dad? More Parents Are Co-Signing Adult Kids’ Mortgages”
There’s a sensationalism element to this.
“Bank of Mom And Dad” is a term that’s made its way into common vernacular in 2026, but there’s also a shame element inherent in the headline above. To note that more parents are helping “adult kids” is to suggest that they shouldn’t be, or that it’s wrong, or that those kids should be embarrassed.
But this is nothing new.
I can take you all the way back to 2014 in this Toronto Life article:
“The Bank Of Mom & Dad: Confessions Of A Propped Up Generation”
The sub-heading reads: “It seems like every 30-something couple has an embarrassing financial secret: their boomer parents are covering their mortgages, child-care costs, and other expenses.”
This article actually used the word “embarrassing”!
I would love to know if any of these people who had help from their parents are actually embarrassed, or if people who have not had help from their parents just want to shame those who did.
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If any of you are brave enough to address the “variable versus fixed” conundrum, the rest of us are all ears!
Happy Monday, folks!
Serge
at 8:14 am
The Fed is not responsible for investors’ greed, but they bailed them out with renewal cliff. The provincial gov bails out the friendly developers, that is also true.
And there is another option for shame, not mentioned above: not to have parents, that could prop you.
Marina
at 9:00 am
The bank of mom and dad has one very interesting aspect to it – we seem to be moving towards a landed gentry in this country. I don’t know if we will actually end up there, but I know it’s an ongoing concern for many parents of my kids’ friends. And we live in quite a moneyed neighborhood, so these are people who would likely end up on the “landed” side. And they are still worried about it.
For variable vs fixed, I think a key component is how active an eye do you want to keep on it. If you are an investor who is actively managing a portfolio of properties, variable makes a lot of sense. You can keep an eye on it and not worry. But if you just own one single family home, life happens. I know people who chose variable, thinking they would lock in if rates started going up. But when rates did go up, quite quickly, they were having a family emergency and their interest rate was not top of mind. So they suddenly found themselves with double the mortgage payment. It’s not a high risk, but I can understand not wanting to worry about it.
We always had a fixed rate. Mostly because when we bought our house, we wanted to have kids, and I did not want to have to keep an eye out on interest rates while raising a newborn on zero sleep. It was right for us. YMMV.
Jenny
at 9:31 am
You bought another property?? Details!!
Serge
at 9:51 am
PS I have read somewhere that last years, only priviliged buyers can “choose” the type of the rate. Others (the majority) should accept what banks dictate them. But not sure if this is true, though…