Fixed vs. Variable Mortgages: What You Need to Know
Choosing between a fixed-rate and a variable-rate mortgage is one of the most important decisions you’ll make when buying or refinancing a home in Ontario. Each option has its strengths — and the right choice depends on your financial goals, budget, and comfort level with risk.
Fixed-Rate Mortgages
- Offer payment certainty and stability.
- Easier for budgeting since your payment won’t change during the term.
- Typically come with higher prepayment penalties if you need to break your mortgage early.
Variable-Rate Mortgages
- Historically outperform fixed rates over the long term.
- Payments may fluctuate depending on lender structure (some adjust the payment, others adjust the principal/interest mix).
- Require flexibility and tolerance for changes when the Bank of Canada adjusts the prime rate.
How to Decide
If you value certainty and predictability, a fixed rate may be best. If you have financial flexibility and can handle potential changes, a variable rate could save you money. Some lenders even offer hybrid options that split your mortgage between fixed and variable.
The Bottom Line
The right choice depends on your risk tolerance, cash flow, and long-term plans. I’ll help you compare both options so you can make the best decision for your situation.
