My mortgage is coming up for renewal – what should I do now?

financialpost.com:

Interest rates have gone up a great deal. We all know that. Where they go from here, we don’t know, but I certainly have a point of view. But the tough question to face is what to do with your mortgage, especially if it is now coming up for renewal?

If I was in this position, I would either look for the best rate on a five-year variable-rate mortgage or switch to a home equity line of credit (HELOC) at prime or close to it, and look to either lock in a longer term at some point in 2024 or 2025 or move to a five-year variable rate.

To start the decision-making process, let’s look at what the current rates are. While these aren’t necessarily the best rates, here are some decent rates for those with an uninsured mortgage (mostly applies to those who don’t pay Canada Mortgage and Housing Corp. insurance fees).

1-year fixed: 7.1 per cent

2-year fixed: 6.7 per cent

3-year fixed: 6.3 per cent

4-year fixed: 6.1 per cent

5-year fixed: 5.9 per cent

5-year variable: 6.9 per cent (prime minus 0.3)

Home equity line of credit: 7.2% (prime)

Over the years, variable-rate mortgages have generally provided a better return than fixed-rate mortgages. One study by Moshe Milevsky, a professor of finance at York University in Toronto, found that Canadian homeowners would have been better off with a variable mortgage almost 90 per cent of the time between 1950 and 2000.

Since 2000, it has also been clear that variable-rate mortgages have resulted in lower interest costs for many. This makes sense since you are paying a premium for knowing exactly what your rate will be for a period of time — peace of mind.

In the minority of times that a fixed-rate mortgage has been better, it’s been during a period prior to rising rates. As we know, a