I have calculated the profit or loss for a fixed rate borrower over the past 20 years at each quarter. I then sorted this data based on the fixed rate at the time the borrower entered into the fixed rate loan and sorted from lowest to highest rate (For example, in Jan 2005 the 3 year fixed rate was 6.60%. A borrower that locked in at this rate was 0.39% better off compared to a variable rate borrower. Therefore, the graph below includes a profit bar of 0.39% at the 6.60% rate interval).
This analysis shows that, based on history, you have a significant chance of being worse off financially if you fix your mortgage when fixed rates are above 7% (to the right of the red line). If you fix when fixed rates are below 7%, you have an even chance of being better or worse off.
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