A few years ago, I remember seeing a statistic that said that if you took out a variable rate mortgage instead of a fixed rate, you would do better in 95 out of the last 100 years. Often the spread between a 5-year variable rate and a 5-year fixed rate was more than 1% and so you could save thousands over a 60 month term.

More recently, about three years ago, the banks and mortgage companies started shaving the discount rate on these mortgages. While they had been Prime – .70-.80 they were now Prime – .45. That’s quite a change. Earlier this spring, the discount came back and now it’s possible to get into a variable rate mortgage with a discount of Prime – 1.0%!
This isn’t very good news for those people in Prime-45 mortgages. But, there’s something you can do.

Go see your favourite Dominion Lending Centres mortgage professional and ask them to calculate the penalty to break your mortgage and get one with the new bigger discounted rate. As you are in a variable rate, this should be 3 months interest. At this discount you should be able to recover that penalty in just a few months.