Fixed vs. variable rate gamble in 2023 - I picked wrong and paid for it

Last February I had to choose between a 5-year fixed at 4.8% and a variable at prime minus 0.5% here in Calgary. I went variable because everyone said rates were peaking and would drop by fall. Well they didn't drop, they went up another 0.75% and I've been kicking myself every month since. Has anyone else been burned by betting on rate cuts that just never showed up?

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skyler_mitchell5mo ago

I mean, my cousin actually went the other way and locked in a fixed rate right before everything went crazy, and now he's just sitting there smug while the rest of us eat the extra payments. Idk, feels like nobody actually knows what's gonna happen with rates, it's all just luck.

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tyler1765mo ago

Push back a little here @skyler_mitchell, but I think it's more about timing than pure luck. Your cousin got lucky with timing, sure, but someone who locked in a fixed rate a year before that would have been paying way more than everyone else during that whole year. So it cuts both ways. I locked in a fixed rate right when rates were dropping and then watched them keep falling for six months, felt pretty dumb about it. Point is, nobody can time this stuff perfectly, but being patient and not chasing rates usually works out better in the long run.

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