Mortgagors continue to roll the dice with variables

A for sale real estate sign outside a suburban house in Calgary. Photo by Azin Ghaffari/Postmedia files

The bond market is wagering the next Bank of Canada move is a hike , though not until late next year.

Will that be enough to actually deter borrowers from rolling the dice on a variable ? Surprisingly, often no.

People are still taking variables in droves, partly to snag some upfront rate savings. Their thinking is that, despite the Bank of Canada signalling a potential bottom in rates, Canada’s economy is weak enough to keep major rate hikes at bay.

And many are relying on the “safety” of fixed payments to insulate their variable mortgages from potential rate hikes.

Explainer: When rates jump, variable-rate mortgage (VRM) payments stay the same, but you pay more interest a