Fixed rates are now “superior,” said BMO in this report released Thursday.
“While we have in the past supported going variable,” circumstances now “favour…locking in...”
That’s been BMO’s rally cry since 2010 when it proclaimed “Time to Say Goodbye…to Variable.” In retrospect, that advice would have cost mortgagors handsomely. But BMO was far from alone in that call.
Few anticipated the economy would drag along the bottom, depressing rates for five years after the great recession. People are now becoming desensitized to statements like “We may not see such low fixed rates again any time soon” (BMO’s latest prognostication).
Sooner or later, economists will be right on fixed rates, partly for the reasons BMO mentions (including higher inflation). But there are things about BMO's report that people need to know about.