In this episode of The Wisdom, Lifestyle, Money Show, host Scott Dillingham debates fixed vs variable mortgages, explaining differences: Fixed locks rates (1-10 years) for stability; variable fluctuates with prime (historically lower, adjusts quarterly by 0.25%).
He covers pros/cons: Fixed offers payment certainty but higher penalties (IRD/3 months interest); variable provides lower payments, more prepayments (15-20% annually), easier exits (3 months interest), and convertibility to fixed—no fees.
Scott recommends variable for investors/uncertainty/flexibility (his choice for all properties), fixed for strict budgets/fear of changes; history (1995-2025) shows variable averaging ~4.5% vs fixed ~5.75%, cheaper long-term.
Penalties/porting: Variables don't port but refund penalties if repurchasing same lender/timeline; fixed ports but not always (e.g., relocation).
If >20% down, pair fixed with line of credit for emergency access without penalties.
In 2025, BoC at 2.25% (cut Oct 29, signaling potential end but options open), variables ~4-5% (down from 2024 peak), fixed ~4.89-5%; forecasts: modest declines to 2% by end-2025/early-2026 (National Bank/TD), easing amid stable economy—favoring variables, per BoC, True North Mortgage, Mortgage Sandbox.
This episode aids informed choices in 2025's declining-rate environment.
Guest Bio
Scott Dillingham is the host of The Wisdom, Lifestyle, Money Show and founder of LendCity Mortgages in Windsor, Ontario, specializing in home and investment financing. With banking and brokerage experience, Scott offers transparent advice on rates and products. Passionate about client education, he draws from personal scenarios to simplify decisions. Connect with Scott at lendcity.ca, call 519-960-0370, or tune in for financial guidance.
Scott Dillingham is the host of The Wisdom, Lifestyle, Money Show and founder of LendCity Mortgages in Windsor, Ontario, specializing in home and investment financing. With banking and brokerage experience, Scott offers transparent advice on rates and products. Passionate about client education, he draws from personal scenarios to simplify decisions. Connect with Scott at lendcity.ca, call 519-960-0370, or tune in for financial guidance.
Key Takeaways
- Fixed Rates: Lock 1-10 years for payment certainty; ideal for budget-conscious/fearful of changes; higher penalties (IRD/3 months interest, often posted rates inflate).
- Variable Rates: Fluctuate with prime (0.25% increments, historically lower ~4.5% avg vs fixed ~5.75%); lower payments, more prepayments (15-20% annually), smaller penalties (3 months interest).
- Flexibility: Variables convertible to fixed (no fees), refund penalties on repurchase (same lender/timeline); don't port but easier exits—Scott's choice for all properties/investors.
- Payments/Prepayments: Variables cheaper initially (e.g., 1.25% vs fixed 2.34% in 2022 recording); allows faster payoff; fixed suits stability.
- Porting/Penalties: Fixed ports (not always, e.g., overseas moves); variables don't but low cost; pair fixed with line of credit (>20% down) for equity access sans penalties.
- History/Predictions: Variables cheaper most years (1995-2025); COVID lows reversed, expect gradual rises post-2025 if inflation/economy booms—needs 4+ increases to match fixed.
- Investor Advice: Variable for uncertainty/exits; fixed if rigid budget—assess personal risk tolerance.
- 2025 Context: BoC at 2.25% (Oct cut, potential pause); variables ~4-5%, fixed ~4.89-5%; forecasts: to 2% by end-2025 (modest declines)—easing favors variables.
Resources and Links
- LendCity Mortgages: https://lendcity.ca/ – Mortgage advice, preapprovals, and rate comparisons.
- Scott Dillingham Contact: Call 519-960-0370 – For fixed/variable consultations.
- CMLS Financial Rate History: https://www.cmls.ca/ – Downloadable PDF on 25-year fixed vs variable trends.
- Bank of Canada: https://www.bankofcanada.ca/ – Rate announcements and forecasts.
Call to Action
If Scott Dillingham's fixed vs variable breakdown in 2025's easing rates helps your mortgage decision, visit lendcity.ca or call 519-960-0370 for a personalized review. Share this episode with those choosing rates amid BoC cuts—tag us on social media! What's your preferred rate type? Leave a review on Apple Podcasts or Spotify to aid others with 2025 forecasts, penalty tips, or investor strategies. Tune in next week for more financial wisdom.
If Scott Dillingham's fixed vs variable breakdown in 2025's easing rates helps your mortgage decision, visit lendcity.ca or call 519-960-0370 for a personalized review. Share this episode with those choosing rates amid BoC cuts—tag us on social media! What's your preferred rate type? Leave a review on Apple Podcasts or Spotify to aid others with 2025 forecasts, penalty tips, or investor strategies. Tune in next week for more financial wisdom.
- (00:10) - Introduction to Mortgages
- (02:16) - Fixed vs. Variable Rates
- (04:54) - Understanding Mortgage Penalties
- (07:11) - Choosing the Right Mortgage
- (11:18) - The Flexibility of Variable Mortgages
- (12:38) - Historical Rate Trends
- (15:40) - Final Thoughts on Mortgage Choices
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