Lenders are slowing reducing the discounts on variable rate mortgages. Up until last month the average discount on a variable rate mortgage was 2.25% or prime -.75%. By the end of this month the average rate will be around 2.60% or prime -.40%. The product has become less profitable for the banks and therefore they are trying push clients back into fixed rate mortgages.
Fixed rates mortgages are still very low with an averaging 4 year at 3.29% or 5 year at 3.49% so the spreads are tightening between fixed and variable. Make sure you consult with a mortgage adviser before making a decision on fixed or variable.