Should you get a variable rate mortgage if you’re 55+?

Understanding Your Mortgage Options in a Shifting Economy

In 2025, many Canadians aged 55 and over are weighing their options carefully. Interest rates are expected to fall—but does that mean now’s the time to choose a variable-rate mortgage?

At Rewind Mortgage, Peter Fabry works closely with homeowners and their families to answer questions like these. For clients nearing or in retirement, mortgage decisions aren't just about numbers. They're about stability, long-term planning, and making choices that align with your lifestyle.

Yes, Rates Are Predicted to Fall—But Not for Everyone

The Bank of Canada’s overnight rate is currently 2.75%, and the prime rate stands at 4.95%. Many economists expect both to drop later this year, potentially bringing the prime rate to around 4.45% by year-end. If that happens, some variable-rate mortgages—typically priced at Prime – 0.90%—could dip to around 3.55%.

Insured fixed rates (for borrowers with minimum down payments and owner-occupied homes) are forecasted to land between 3.82% and 4.00%.

Note: These are insured mortgage rates and are for illustration only. They do not reflect alternative, private, or reverse mortgage products.

That last part matters—because these rates often don’t apply to homeowners pursuing a Reverse Mortgage.

Why These Rates May Not Impact You

If you're 55 or older and exploring a Reverse Mortgage, it’s important to understand that this type of financing is structured differently from traditional mortgages.

Reverse Mortgages typically have slightly higher interest rates than what you see advertised for insured products. That’s the trade-off for the flexibility they offer—no required monthly payments, access to tax-free home equity, and no income or credit requirements.

So, while rate cuts may dominate the headlines, they won’t significantly shift the terms of most Reverse Mortgages.

However, if you’re considering a traditional or alternative mortgage—and can qualify based on income or other criteria—then yes, current rate trends could play a more important role in your decision.

Peter Fabry often explains it this way:

“If you’re comparing fixed and variable rates, you're likely still in the traditional lending space. But if you're exploring Reverse Mortgages, the conversation shifts toward flexibility, cash flow, and stability—less about chasing the lowest rate.”

Variable vs. Fixed: When It Still Matters

For those who do qualify for traditional lending—perhaps in early retirement or with additional income sources—variable rates may offer savings if rates continue to fall.

But those savings come with risk. For homeowners on fixed incomes or tighter budgets, even small rate increases can affect monthly comfort.

Peter typically recommends fixed-rate mortgages when:

• Predictable monthly payments are a priority

• Income is limited or fixed

• The plan is to keep the mortgage long-term

Variable rates may be better suited if:

• You have financial flexibility

• You expect to refinance or sell before the term ends

• You’re confident in the direction of rates—but can still manage if they increase

Reverse Mortgage Clients Have a Different Goal: Flexibility, Not Just Rate

For the majority of Rewind Mortgage clients—especially those aged 60+—the conversation often shifts away from rate chasing altogether.

Instead, Peter and his team focus on helping clients:

• Access equity without adding monthly payment strain

• Stay in their homes longer while improving financial stability

• Explore side-by-side options, including traditional refinancing, HELOCs, and Reverse Mortgages

Reverse Mortgages aren’t the cheapest product in terms of rate—but they’re not meant to be. They’re designed for homeowners who prioritize cash flow, control, and peace of mind over short-term savings.

And when adult children are involved in the conversation—as they often are—Peter takes the time to lay out all the choices so families can make informed, unified decisions.

Housing Market Outlook Adds Perspective

According to CREA’s latest housing forecast:

“Sales are expected to pick up in late 2025 if interest rates decline, though price growth will remain modest.”
(Source: CREA)

This suggests home values will remain stable—an important factor for those planning to access their equity in the near future.

The Bottom Line from Rewind Mortgage

If you're eligible for a traditional mortgage and rate flexibility fits your situation, variable may be worth exploring—carefully. But if you're considering a Reverse Mortgage, don't worry about chasing interest rates. Focus on what gives you peace of mind, flexibility, and long-term comfort.

Peter Fabry’s advice?

“Let’s review every option—traditional mortgage, reverse mortgage, HELOC—and see what fits best. Once you understand your choices clearly, you’ll know exactly how to move forward.”

Let’s Explore the Right Option for You

Whether you're exploring a Reverse Mortgage, helping a parent plan, or looking at ways to refinance later in life, Peter Fabry and the Rewind Mortgage team are here to help—without pressure.

Contact Peter Fabry today at 289-312-6333 or info@rewindmortgage.ca

Sources:

• WOWA.ca – Interest Rate Forecast

• Canadian Mortgage Trends – Liberal Election & BoC Policy Outlook

• CREA – Housing Market Quarterly Forecast

• CMLS – Q2 2025 Broker Market Report