Fixed vs. Variable Mortgage Rates: How to Choose in Today’s Market


When interest rates began to stabilize, real estate investors shifted their focus from questioning if investing in real estate is a good idea to wondering if now is the right time to invest.

With Canada recently cutting interest rates for the first time in over four years, and likely more cuts on the horizon, confidence is growing. The questions are evolving from “why” and “when” to “what” – specifically, what’s the best strategy for investing in real estate today?

Another common question we’re getting now is whether to choose a fixed or variable rate, given that rates are trending down. We’ve done the research and have some conclusions. If you’re curious about our take, keep reading.

Understanding Fixed and Variable Rates in Today's Market

Since January, fixed rates have been coming down in anticipation of future rate cuts. When the Bank of Canada (BoC) actually cut rates in June, much of that change was already factored in, so fixed rates didn’t move much. As of today, 3-year fixed rates are just below 5%. 

Variable rates, however, move with the BoC’s rates and hadn’t dropped in over four years until the recent 25 basis point cut. Now, variable rates are around 5.9% to 6%.

Choosing the Right Rate Based On Bank Forecasts

Currently, Canadian banks have different predictions on how fast rates will drop. 


  • BMO’s cautious projections imply the average variable rate over the next three years will be 5.23%.
  • RBC’s predictions take the average variable rate to 4.74%.
  • TD and CIBC’s predictions take the average variable rate to 4.59%.

Even the most aggressive predictions suggest the average variable rate won’t be much better than the current fixed rate. Given that fixed rates provide certainty, choosing a fixed rate might be the smarter move for now.

Real Estate Prices and Interest Rates

Typically, real estate prices move opposite to interest rates. Since many people are still choosing fixed rates, which aren’t changing much, we don’t expect real estate prices to skyrocket due to the rate cuts. 

However, compared to a couple of years ago, the chances of real estate prices dropping are much lower now that rates have stabilized. This means if you invest now, you’ll be entering a market with better risk-adjusted returns.

How We Can Help

If you haven’t heard of us, we’re a real estate sales brokerage based in Toronto. We specialize in buying and selling investment properties, mostly houses and multiplexes. Our focus is on using numbers to help you make smart investment choices. 

Whether you’re eyeing a ready-to-go multiplex or need coaching to convert single-family homes into multiplexes, we’re here to help. Here’s what it’s like to start as a client with us:

  1. Initial Consultation: We’ll talk with you to understand your needs and teach you how to invest wisely in Toronto real estate.
  2. Market Search: We’ll search the market to find the perfect property for you.
  3. Renovation Support: If the property needs renovations, our trusted contractors are ready to help, and we’ll support you through the whole process.
  4. Leasing and Management: If you need help renting out and managing your property, our leasing and management team is here for you.

Ready to get started? Click on the link below, and let’s start working together!

What Toronto Real Estate Investment Is Right For You?

Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!