Fixed vs Variable in 2026? The New Math for Canadian Real Estate | Streetwise 10 (9/10)

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If you are renewing the mortgage on your family home or financing an investment property, you are probably agonizing over the ultimate Canadian real estate question: should you take a fixed rate or a variable rate mortgage?

For months, the popular advice was to avoid the 5-year fixed option and stick to short-term or variable rates, hoping the Bank of Canada would continue dropping rates. However, the financial markets have suddenly shifted, and the smart money is officially pointing back to the 5-year fixed rate as the best overall value right now.

In this episode, Dalia Barsoum breaks down exactly why the math has flipped. We analyze the Canadian government yield curve to show how major macroeconomic events have caused the market to bet that borrowing costs will stay higher for longer.

We also reveal the "retail" forecast curves for the next five years:

The 5-year fixed rate is sitting around 4.29% today, but is projected to climb to 5.39% in five years.

The 5-year variable rate is currently around 3.7%, and is projected to increase to 4.65% over the same period.

Because interest rates are forecasted to climb steadily, locking into a 5-year fixed rate today is mathematically projected to be your best financial shield against future increases.

But there is a major catch! While the 5-year fixed wins on paper, your specific property plan is the biggest influencer in your rate choice. If you plan to sell, refinance, or do a major renovation before the term is up, breaking a 5-year fixed mortgage early can trigger a massive Interest Rate Differential (IRD) penalty. This penalty can cost tens of thousands of dollars, completely wiping out any money you saved on the rate. We break down exactly when a shorter-term fixed or variable rate is the safer, smarter choice.

💬 Are you Team Fixed or Team Variable right now? Let us know in the comments below!

TIMESTAMPS:
00:00 - The ultimate real estate question: Fixed or Variable?
01:44 - The Macro Picture: Analyzing the Canadian Government Yield Curve
02:43 - Wholesale Forecast Curves: Prime Rate and 4-Year Swap
03:43 - Retail Forecast Curves: Projected Fixed & Variable Rates
04:44 - Why the 5-Year Fixed wins the math game right now
05:38 - The Catch: Property plans and Interest Rate Differential (IRD) penalties
07:12 - The Final Verdict and your next steps

ABOUT STREETWISE MORTGAGES:
Streetwise Mortgages is a multi-award-winning mortgage brokerage specialized in income property financing for Canadian real estate investors, business owners, and empire builders. Led by two-time Canadian Mortgage Broker of the Year, Dalia Barsoum, we help you connect the money dots to scale your portfolio.

Disclaimer: The information in this video is for educational purposes only and does not constitute financial, legal, or tax advice. Please consult with your accounting advisor and legal team before executing these strategies.

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