I don't think I would ever choose a variable rate when buying a house (of course, I've bought exactly one house in my life). Fixed rates would definitely have to be higher than 4.5% for me to even think about it. If interest rates go down significantly, you always have the option of refinancing a fixed rate and are protected from increased rates. With variable rates, if rates go up you are just screwed...and may not be able to afford it.