Fixed vs Variable in Today’s Market: Is It Finally Safe to Switch?

Fixed vs Variable in Today’s Market: Is It Finally Safe to Switch?

For the last few years, choosing between a fixed and variable mortgage has felt a bit like choosing between jumping into cold water or staying on the dock and hoping the sun comes out. Neither option felt great… and nobody wanted surprises.

But 2025 has finally brought something we haven’t seen in a while: stability.
Inflation is down, the Bank of Canada has softened its tone, and rate cuts are either happening or being priced into the market.

That shift has sparked the big question again:

Is it finally safe to switch to a variable mortgage?
Let’s break it down in simple, human terms.

What’s Changed Since 2020–2023?

If you were anywhere near the mortgage world during that rollercoaster, you remember the chaos:

• Rates rising at record speed
• Variable-rate clients watching payments increase over and over
• Trigger rates and rising balances
• Fixed-rate clients locking in out of fear

The uncertainty made fixed the “default” choice for years.

But 2025 looks different:

• Inflation is easing
• Bond yields have come off their highs
• Several economists expect rate cuts into 2026
• Lenders are starting to advertise more competitive variable options again

In other words, the clouds are finally starting to break.

Fixed Rates in 2025: The Comfort Option

Fixed rates still offer one huge advantage: total predictability.

When you lock in:

• Your payment stays the same
• Your rate stays the same
• Your budget stays the same

For families, business owners, or anyone who likes certainty, a fixed rate is still the “sleep at night” choice, especially if you’re risk-averse or on a very tight budget.

Who a fixed rate is great for:
✓ First-time buyers
✓ People planning to stay in their home for the entire term
✓ Anyone nervous about more rate fluctuations
✓ Borrowers who prioritize a stable budget over saving a bit of interest

Variable Rates in 2025: The Comeback Option

Variable hasn't been the popular kid in a long time… but it’s finally making a comeback.

Why?

Because we’re entering a period where rates are more likely to go down than up or at the very least, stay stable.

If cuts come as expected, variable clients could benefit from:

• Lower monthly payments
• Faster principal repayment (depending on the structure)
• More flexibility if they need to break their mortgage early

Remember: variable penalties are usually just 3 months’ interest, versus huge IRD penalties on many fixed-rate products.

Who a variable rate works for:
✓ People with some flexibility in their budget
✓ Borrowers comfortable with mild fluctuations
✓ Homeowners likely to refinance, sell, or restructure
✓ Investors who want flexibility for future equity plays

So… Is It Safe to Switch to Variable?

Here’s the real answer:
It depends on your goals, your timeline, and your comfort level.

But compared to the last few years, switching to a variable now is far less risky and for some clients, it’s even strategic.

A few signs variable might make sense for you:

• You believe rates will decline over the next couple years
• You want flexibility to move, refinance, or tap equity
• You’re comfortable with minor payment changes
• You want to take advantage of potential savings

A few signs fixed is still the right call:

• You hate the idea of payment changes
• You’re on a strict budget
• You want to know your exact cost for the full term
• You’re risk-averse and want long-term stability

The Hybrid Option Nobody Talks About Enough

There’s also a middle ground:
Split your mortgage between fixed and variable.

For example:
• 50% fixed
• 50% variable

You get stability and flexibility plus you can tilt the split however you want. It’s one of the most underrated strategies in today’s market.

Just a quick note:
Not all lenders offer hybrid/split-rate products, and availability can vary depending on the lender and the type of mortgage. So it’s definitely something we’d check on a case-by-case basis.

Final Thoughts: Your Mortgage Should Match Your Life

There’s no perfect mortgage type just the one that fits your plans.

Fixed is great for peace of mind.
Variable is great for flexibility and potential savings.
Hybrid is the best of both worlds.

The key is matching your mortgage strategy to your life, your future plans, and your financial comfort zone.

If you’re unsure which way to go, reach out anytime. I can run the numbers side-by-side, compare scenarios, and help you figure out which option gives you the best outcome not just today, but for the next few years.

Book a free (below) mortgage strategy session with me today

https://calendly.com/skokomortgages/15min?back=1&month=2025-11

Let’s take advantage of the opportunities this market is offering.

👉 rob@skoko.ca
👉 604-771-4085
👉 skokomortgages.ca