Hi, 
Please answer this question if you are familiar with mortgages. My 
cousin recently bought a condominium apartment in Toronto, Canada. She 
chose a variable mortgage rate, and now pays prime - 0.5% (4.0%). 
Economists predict that interest rates will rise in Canada. Is it wise 
to have a variable mortgage when you think rates will go up? 
She bought a place for $262,000 and put 35% down. Her mortgage term is 
5 years (amortized over 25 years). Her cost of borrowing (interest) 
will be $32,348 over the term, assuming rates don't go up. Her total 
payment over 5 years will be $54,355, and the balance due on the 
Maturity wil be $148,617. From my calculations, it seems that she will 
pay more towards interest than towards principal! Does that sound 
right? 
 
Thus I am asking two things: (1) Should she get a fixed rate since 
rates will probably go up (2) Does her mortgage sound fair?