Variable or fixed rates?

Despite the rush to lock in at the historical low fixed rates, variable rate mortgages still may represent an attractive option for many borrowers.   When the Bank of Canada last lowered the prime rate to 0.25%, Mark Carney took the unpresented step of stating that the prime rate would not increase until at least the 2nd quarter of 2010 unless inflation got out of control.    What does that mean for the average client?   Right now, the spread between the best fixed and floating rates is 0.80%.    On a $200,000 mortgage this would represent $1600 in interest savings in one year.    In early 2010, you could then review your situation and potentially lock in (at rates that would be at the same level as today +/-) or continue to float with the market.   In most floating rate mortgages, if your broker/bank has looked out for your best interests, you can lock in to a fixed rate term at any time without penalty.     Certainly food for thought.