Khurram Mirza wrote:
Thanks for sharing. With respect to here in Canada I for one having a tough time deciding whether to go with Variable vs Fixed for my BRRR projects due to BoC continuous rate hikes. Variable gives pre-payment flexibility and examined historically, variable rates have proven to be less expensive over time but history repeats itself until it doesn't.
For BRRRR or repositioning projects, I tend to go variable for the reasons you state. However, I have at times used fixed mortgage products that have a term that aligns with my exit timeline. If I run over then it just becomes an open mortgage. On my stabilized assets, I have a higher mix of fixed vehicles more for operational cash flow predictability. That and the fact that with commercial assets, variable products are rare.
Here is an article I wrote (with feedback from John Walsh) on managing risk with respect to variable vs fixed products: https://aliferous.ca/should-i-go-variable-or-fixed-rate-mortgage/