Are Fixed Rates Better?-Tony Machigiano

There's been a lot of talk and media coverage around the ultra low fixed rates that are currently being offered. BMO started at 2.99% for 5 years however they announced today that rate is now going up to 3.49%. Two days after BMO announced this rate most of the other banks, including RBC, came out with a 4 year fixed term at 2.99% but with less restrictions.

Historically speaking people who have went with a Variable rate mortgage as compared to people who constantly take 5 year fixed terms have over the last 25 and 50 year periods paid less interest over the long term. That may not be the case over the next 4 or 5 years.

It just might be a very good time to take a fixed rate mortgage. Not only because these rates are so low but also because the spread between Fixed & Variable has never been less. Normally the difference in rate between a fixed and variable mortgage term is at least 1 or 2% Not anymore. It may in the future again but not today. The best Variable rate out there right now is most likely around 2.8%. So with 4 and 5 year mortgages now being offered at 2.99% you can see there is little difference in the rate but you benefit with the fixed rate as it will stay the same over the next 4 to 5 years. 

RBC's current economic forecast for rates in Canada is predicting the Bank of Canada will possibly hike the Prime rate from 3% today to 3.25% near the end of this year and to 4% by the end of 2013. 


A good mortgage advisor should be discussing this current rate environment with you and making recommendations according to your particular needs and circumstances.

Sincerely, Tony


Tony Marchigiano | Mortgage Specialist - Mortgage Sales BC Region, RBC Royal Bank | Royal Bank of Canada | T. 604-505-7109 | F. 778-737-0054



*indicates required fields.

Meet the team

  • Will Pratt
  • Justin Sabbagh
  • Mike Wilcox

Mortgage Calculator

Purchase Amount:
Down Payment:
Interest Rate:
Payment Interval:
Mortgage Term (Years)
Total Payments:
Total Amount Paid:
Total Interest Paid:


The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.