As promised, Quasi:
The main issue with the lock in and keeping with the variable rate is Risk tolerance. If you did lock in, atleast your money allocation is easy, you put X into MTG, X into RRSP, X into vacation and never have to worry for the next 5 years.
Not really knowing your full situation, i'll quote an article:
Quote:
Instead of trying to guess where rates are headed, consumers would do better to think about their own situation. They should evaluate their personal balance sheets and risk tolerance. The decision of whether to go short (variable) or long (fixed) will depend on the consumers’ tolerance for risk as well as their ability to withstand increases in mortgage payments.
The first time homebuyer or those with minimal down payment represent the perfect consumer to go long-term fixed mortgage rate. If the consumer is at or near their maximum GDS/TDS ratios, they cannot take the chance of increasing interest rates. The worrywart, who is constantly looking at interest rates and can’t sleep at night wondering if it is time to lock in, should also go long-term fixed mortgage rate. The seasoned veteran who has plenty of equity in their home or has little time left on their mortgage, i.e. 5 to 10 years remaining on their amortization, can afford to go variable rate and take the risk.
Something to keep in mind is that variable rate mortgages allow consumers to lock in to a fixed rate at any time without costs. While there's no up-front cost to the change, not all lenders will lock in at the fully discounted five-year fixed rate mortgage.
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If you asking for an opinion, I wouldn't change your P -0.75 until the 30months is up, not knowing how much you pay monthly and how far you're into your mortgage. Your savings are acutally quite substantial with a 2% different in rate and with 30mnths left, i'll take advantage of that,
HISTORICALLY, variables over the last 40years or so, variable has come out on top in saving yourself money over a life of a mortgage:
Example:
Quote:
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Linda Long had a fixed rate of 7.5 per cent, with monthly payments of $799. Shelly Short opted for a variable rate mortgage (VRM) that began with a rate of 6.5 per cent. Her rate changed 15 times over the course of the first three years, fluctuating between 3.75 per cent and 6.25 per cent, but never exceeded the 6.5 per cent at its outset. She chose to match Linda's repayments of $799. In the first three years both women repaid $28,749. The interest on Linda's loan totalled $21,394 and her principal declined by $7,355. The interest on Shelly's loan amounted to $13,171 and her principal dropped by $15,576. That Shelly repaid $8,221 more than Linda off the principal after only three years, even though the total repayments were identical
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Yes the rates are low @ 3.65% as long as you can live with risk tolerance. I would stick with your current mtg, even in 30mnths, prime rate has increase back to pre 2008 lvls, which would average roughly 4.5% while fixed were around 6.5%.
Take a look at this graph, and it shows you what was fixed (with a 1.5% discount, as thats roughly the market avg.) vs a variable prime (without a -%)
http://www.canequity.com/mortgage_rate_history.stm