Quest

It's all about how you determine your risk factor.

If you are a risk taker, go with variable.

If you are risk-adverse (like me), go with fixed.

Some credit unions now offer 1/2 and 1/2, meaning that you can do 1/2 of your mortgage variable (to take advantage of the low interest rate); and the other 1/2 fixed (up to 5 yr fixed). That would even it out to approx 2.8% avg.

If you study these package offering closely, you'll also notice that they give you one "get out of jail free" option during the mortgage period: that is for you to bail out (change the other 1/2 from fixed to variable if the interest rate increase) w/o penality. Beware of some of the banks that does not give you the bail out w/o penality options.

Good luck!

Q.

BTW: I'm on a 5yr fixed right now, and will consider 1/2 and 1/2 when our current mortgage is up for renewal.