Fixed Rate vs. Variable Rate

The choice between fixed or variable rate mortgages will depend on your tolerance for risk as well as your ability to manage possible increases in mortgage payments.

A fixed rate mortgage is appealing for those who value stability and consistency–for example, anyone on a tight monthly budget who wants to anticipate their monthly costs long-term.

Variable rate mortgages are calculated on an ongoing basis, at a lender’s prime rate plus/minus a set percentage. Variable rates shift according to the economy, so there’s potential for savings, but there is also the risk of rate increase.