Fixed Rate Mortgages vs. Variable Rate Mortgages

Important Mortgage News:
QUESTION:
Inevitably what happens when the difference between Fixed Rate Mortgages and Variable Rate Mortgages is small?

ANSWER:
Under current conditions both look attractive. However, the Variable Rate Mortgage would appear more attractive due to the initial savings at the beginning of the term.
It is likely that a borrower will be better off with the fixed rate mortgage when the difference between the two rates is small due to the inevitable rise of lending rates, in which case low rates over the course of the 5 year term would not be sustained.