Fixed vs Variable Mortgage

This is the second most often ask question in the mortgage industry (the first is what is the best rate) and there is no simple answer. Today a fixed 5 year mortgage and a variable 5 year mortgage can be had for exactly the same rate. Right now I am advising my client to give the variable option strong consideration because all indications are that we will see the prime rate drop in 2007 and therefore we will see some significant savings in interest payments. Unfortunately no one has a crystal ball and we cannot predict the future with 100% certainty. So if you are one of those people who cannot sleep at night without knowing what your mortgage rate will be then do not even consider a variable rate mortgage.