It depends on your situation. If you are a real estate investor looking to recycle equity and grow your portfolio, a variable rate mortgage is recommended because it gives you flexibility. If you are a homeowner with no plans to sell and you are looking for stability in your monthly housing costs and the peace of mind that comes with a fixed rate mortgage, then consider a fixed rate.
You need to run a cost-benefit analysis. Breaking a fixed rate mortgage comes with a penalty, so you must factor in all costs associated with discharging the loan from your old lender and switching to a new lender. In some cases the switch does not make sense, particularly if you are looking to break in year one or two of locking into a fixed rate mortgage, or where the interest savings do not offset the cost associated with breaking the loan.
Porting is possible but comes with fine print. Even if your mortgage is portable, you have to requalify to port and lenders often have a window during which you can port, such as only within 90 days of the sale of the property. As for refinancing with the same lender, if at the time of refinancing your income, credit, or portfolio changes, or if the lender has changed their lending policies, then you will be forced to break that loan to explore other alternatives.
The Bank of Canada has committed to keeping its overnight target rate low until the economy is on demand and the economic slack from the pandemic is absorbed, which is likely to be late 2022 or early 2023. Given this, variable rate mortgages are expected to remain low and stable until 2023. On the fixed rate front, government bond yields started to go higher in August and economists are expecting them to continue to rise as the economy shows stability, which means five-year fixed rates are also expected to rise.
