Fixed vs. Variable Rate Mortgages – Which Fits Your Lifestyle?

Choosing between a fixed and variable rate mortgage can feel like trying to guess the weather months in advance—should you pack a raincoat or sunglasses? With a fixed‑rate mortgage, your interest rate stays the same for the entire term. That means predictable pay

ments, which can bring peace of mind if you’re on a strict budget or if rising rates would keep you up at night. Fixed rates may start a bit higher, but they insulate you from market swings driven by factors like inflation or Bank of Canada announcements. If you love stability and don’t want any surprises, fixed could be your jam.

On the flip side, variable or adjustable‑rate mortgages are tied to your lender’s prime rate, which moves when the Bank of Canada adjusts its overnight rate. Historically, variable rates have averaged lower than fixed rates over time. When rates fall, your interest cost drops too—which means potential savings. But the reverse is also true. If rates climb, your payments can go up or a bigger portion will go toward interest. Variable rates suit buyers with flexible budgets who can handle some fluctuation or who plan to refinance or move before rates rise dramatically. Think of it like taking the scenic route—you might enjoy unexpected scenery, but you should be comfortable with the journey.

So how do you choose? Consider your financial goals, tolerance for risk, and how long you plan to keep the mortgage. If you’re buying your forever home and love the idea of budgeting exactly, fixed may help you sleep better. If you’re comfortable riding the rate wave and want to maximise savings when rates are low, variable could be a smart bet. And remember—you don’t have to decide alone! Working with a mortgage agent lets you explore hybrid options or mix-and-match solutions that combine the best of both worlds.

Ready to talk mortgages on your terms?

Whether you’re crunching numbers late at night or just day‑dreaming about your next home, I’m here for you. Call or text me at 519‑575‑1804, or send an email to cferguson@dominionlending.ca.

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