Take a single 1/4 point rate hike for instance. If you have a $300,000 mortgage, amortized over 25 years, a 0.25% hike costs you about $43 more a month. What’s more, you’ll pay $3611 more in interest over 5 years while repaying $1018 less in principle.
If the Bank of Canada raises 1/2 point, double those numbers.
The short of it is this. If you want the benefits of a variable (i.e. a lower initial rate and the chance to benefit from rate declines) be sure you can handle the payments if variable rates jump 1% more above today’s 5.25%-5.35%.
Otherwise consider a fixed-rate mortgage instead.