The rapid increase in interest rates has dampened Canadians' enthusiasm for variable-rate mortgages.

According to data from Ratehub.ca, inquiries for five-year variable rates have significantly decreased this year, accounting for only five percent of total submissions, compared to 26 percent in 2022.

On the other hand, interest in five-year fixed mortgage rates has risen to 79 percent from 66 percent in the previous year.

During the height of the pandemic, variable-rate mortgages were popular as the Bank of Canada had slashed its benchmark interest rate to a historic low. However, the trend started to reverse in the first quarter of 2022 when the Bank of Canada began raising rates to combat high inflation. Currently, fixed rates make up the majority of inquiries, with 95 percent going towards fixed-rate mortgages. The data also indicate an increasing demand for shorter-term fixed rates.

Experts suggest that variable rates are unlikely to regain popularity until the Bank of Canada cuts rates, which may not happen for some time. Despite the decrease in interest in variable rates, the Canadian housing market has shown strength, with sales and prices experiencing growth in April.