Making the choice between fixed rate or variable rate will be one of the biggest decisions you’ll make when seeking a mortgage. Not to stress you out but this decision could be the difference of years to pay off your mortgage, and could cost or save you thousands! Since it is such a big decision it is important that you understand what a fixed rate and variable rate is, as well as the pros and cons of each.


A fixed interest rate is when your rate is locked in for the term of your mortgage. This means that the interest rate will not change until it’s time for you to renew! 

What are the pros of a fixed interest rate?

This is a good option for homeowners who like stability or who are worried about having a tight budget. There is no risk of your interest rate changing which makes your monthly payments very predictable and it becomes very easy to budget.

Fixed rates are honestly just easier to understand. You won’t need to stay on top of what the changing rates are looking like and what impact that will have on your mortgage payments.

What are the cons of a fixed interest rate?

Fixed interest rates tend to be higher than variable interest rates which means starting off your mortgage payments will be higher. 

You are locked into the same interest rates for the entire term, which can be looked at as a positive but there is a downside. If interest rates were to fall you would still be stuck paying the original interest rate. 


A variable interest rate will change over time. The changes are based on the rate that the Bank of Canada lends to the financial institutions.

What are the pros of a variable interest rate?

Variable interest rates tend to be lower than fixed rates and that is because it is considered a riskier option for the homeowner. Your initial monthly payments will likely be less which may help you qualify for a higher loan amount.

There is a chance that rates fall which means more of your monthly payments will be going towards the principal rather than the interest and your mortgage will be paid off quicker.

What are the cons of a variable interest rate? 

The one downfall of a variable rate is the chance that rates will rise. If this were to happen your payments would increase, more money would be going towards interest rates rather than your principal and it could extend the length of time it would take to pay off your mortgage.

There are lots of things to consider when choosing between fixed rates and variable rates such as your budget, how long you intend to keep that property and what you’re comfortable with. It’s smart to seek advice from a professional and weigh your options before making any decisions. Send me an email if you’re ready to get started!

Book a Consultation with me today!

Subscribe to our newsletter

Providing solutions for over 16 yrs in the industry. Big Bank Experience – in financial advisory roles – specialized in real estate lending. More content here.