Variable-rate mortgages are making a comeback in the GTA, driven by the allure of upfront savings. According to a recent report, nearly half (47%) of prime borrowers at Dominion Lending Centres Group opted for variable rates in November, a significant jump from 25.6% in August. This surge is fueled by expectations of economic headwinds and potential rate cuts. However, experts caution that this strategy comes with risks, especially with the Bank of Canada signaling a possible end to its easing cycle and potential rate hikes on the horizon.<\/p>\n
Robert McLister, a mortgage strategist, suggests that while variable rates offer flexibility and potential savings, borrowers should be aware of the potential downsides. Factors like sticky inflation, a soaring stock market, and significant AI investments could influence future rate movements. He also highlights the historical advantage of variable rates, citing studies that show their long-term success. However, he emphasizes that these studies may not fully reflect current market conditions and risks.<\/p>\n
McLister recommends considering hybrid mortgages as a way to balance risk and potential reward. Ultimately, the decision to choose a variable or fixed-rate mortgage depends on individual risk tolerance and financial circumstances. For a deeper dive into the pros and cons, read the full article on Financial Post: [https:\/\/financialpost.com\/real-estate\/mortgages\/variable-rate-mortgages-surged-savings-worth-risk](https:\/\/financialpost.com\/real-estate\/mortgages\/variable-rate-mortgages-surged-savings-worth-risk)<\/p>\n