Fixed vs. Variable Rates: Which Mortgage is Best for Calgary’s Market?

Mortgage Broker in Calgary Alberta Canada

If you’re buying a home in Calgary, you’ve probably already heard the question: “Are you going fixed or variable?”

And if you're like many first-time homebuyers, you might be thinking, “Um, I just want a house.” Don't worry — you’re not alone. The mortgage Advisor world can be a bit overwhelming, but choosing between a fixed-rate and a variable-rate mortgage doesn’t have to be complicated. This guide breaks it down in simple terms, especially in the context of Calgary’s current housing market.

Fixed-Rate Mortgages: Set It & Forget It

A fixed-rate mortgage means the interest rate stays the same for the entire term of the loan — usually 3 to 5 years. Here’s what that looks like:

• Consistent monthly payments: Your payment will stay the same throughout the term of the mortgage.

• Easy budgeting: Since your payments won’t change, you can plan your finances with confidence.

• Protection if rates rise: If interest rates increase, you won’t be affected. Your rate is locked in.

A fixed-rate mortgage is a great choice if:

• You like stability: If you prefer knowing exactly what your payments will be every month, a fixed-rate mortgage is perfect for you.

• You’re on a tight budget: With fixed payments, you won’t have to worry about fluctuating costs, making it easier to manage your monthly finances.

• The market feels uncertain: Given the uncertainty of interest rates in 2024, locking in a fixed rate can provide peace of mind that you won’t be caught off guard if rates increase.

Variable-Rate Mortgages: Ride the Wave

A variable-rate mortgage starts with a lower interest rate, but the rate can change during the term of your mortgage, based on market conditions. While your payment amount might stay the same, the way your payment is divided between the interest and the principal changes as rates fluctuate. Here’s what to consider:

• Lower initial rate: Variable-rate mortgages often start with a lower interest rate than fixed-rate options.

• Potential for rate changes: Interest rates can go up or down, so your payments might change over time, but the initial rate tends to be more attractive.

• Risk and reward: If rates go down, your mortgage becomes cheaper. However, if rates increase, your payment could rise.

A variable-rate mortgage works well if:

• You have financial flexibility: If you’re comfortable with the possibility that your payments might go up or down over time, a variable-rate mortgage might be for you.

• You believe rates will drop: If you expect that interest rates will decrease in the future, locking in a variable rate could save you money over time.

• You don’t mind a bit of risk: A variable-rate mortgage introduces some uncertainty, but it also offers the potential for lower payments if rates remain steady or drop.

So... Which One Should You Choose?

The truth is, there’s no one-size-fits-all answer. Your decision depends on factors like your budget, your comfort with risk, and the current state of the market. It’s all about what works best for your personal situation.

Here’s the key takeaway: You don’t have to make this decision alone.

A CIBC Mortgage Advisor can help you navigate the choice between fixed and variable rates by:

• Assessing your income, future plans, and risk tolerance: They’ll help you figure out which option aligns with your financial situation and goals.

• Comparing the pros and cons of each option side-by-side: With their expertise, you’ll have a clear understanding of what each option means for your monthly payments and long-term plans.

• Suggesting a hybrid or blended mortgage: If you’re uncertain, a hybrid mortgage — which combines both fixed and variable rates — may be a good option to give you some stability with flexibility.

A CIBC Mortgage Advisor is there to guide you without pressuring you into a decision. Their goal is to make sure you fully understand the implications of your mortgage choice, so you’re not left with regrets down the road.

Final Take?

Buying a home in Calgary’s current market is already a big decision. Don’t let choosing between a fixed or variable mortgage become another source of stress. Talk to a mortgage professional who knows the ins and outs of the market and can help you make the right +choice for you.

With the right mortgage strategy, you can enjoy your new home while staying on top of your budget. Your future home and finances will thank you.

Renewing Your Mortgage? Why You Should Consult a CIBC Advisor First

Let’s be honest — renewing your mortgage probably doesn’t spark the same excitement as buying your first home did. There’s no Pinterest board. No new keys. No champagne. Just paperwork… and maybe a reminder in your inbox that your term is ending soon.

But here’s the thing: mortgage renewal is more than just a routine task. It’s a golden opportunity — to lower your interest rate, change your terms, consolidate debt, or even get access to equity. But only if you ask the right questions. And know your options.

That’s where a CIBC mortgage advisor comes in.

Wait… Do I Really Need to Talk to Someone?

You might be thinking, “Can’t I just click renew and move on?”

Technically, yes. But if you simply auto-renew with your current lender without exploring the market or understanding what’s changed in your financial life, you could be leaving money on the table.

Think of it like this: would you re-sign a gym membership without checking if there’s a better deal elsewhere or if your goals have changed? Probably not.