Fixed Rate Mortgage or Variable Mortgage
After you have secured your mortgage, one of the first important decisions, is choosing between a fixed rate mortgage or a variable mortgage. The choice is a personal decision and can depend on your financial situation, among other factors.

Fixed Rate Mortgages
Fixed rate mortgages offer stability in the sense that the mortgage rate and the payment you make each month will always be the same for the length of your mortgage term. Fixed rate mortgage terms come in a variety of options. The most common being a 1, 2, 3, 4, 5 and 10 year mortgage terms. The mortgage term is the length of time in you commit to the mortgage rate, lender, terms and conditions. A fixed rate mortgage is are a popular option for those who are looking for stability and peace of mind. Over 60% of people choose a fixed rate mortgage, even though historically, fixed rate mortgages are proven to be higher than variable mortgages.

PROS:
- Payments remain fixed
- Offers stability

CONS:
- Rates historically higher
- Higher costs to break mortgage

Variable Rate Mortgages
Variable rate mortgages are more risky but, historically offer lower mortgage rates over time. Variable mortgages fluctuate with the Bank of Canada prime interest rate. Variable rates are quoted as prime (+ -), and although the prime rate will fluctuate depending on outside factors, the relationship of prime (+ -) will always remain the same over the length of your mortgage term. Many consumers looking for low mortgage rates will often choose a variable rate mortgage. Due to the risk factor, variable rates are only chosen by 30% of consumers, even though they will provide lower rates than that of a fixed rate mortgage. Over the past year, variable rates were at an all time low as some lenders were offering prime -1%. Discounted variable mortgage rates have since been reduced and as of late, variable rates are very similar to fixed rates.

PROS:
- Rates historically lower
- Lower costs to break mortgage

CONS:
- Rates can change overnight
- No stability over long term

Mortgage Definitions, Home Buyers Tools, Tips and Useful Info: