Fixed or variable: the right choice depending on your project

A fixed rate is a mortgage whose interest rate stays exactly the same for the entire term. Your payments don’t move: ideal if you value stability and a budget with no surprises.

Quick advantages:

• Predictable payments, easy to plan
• Protection if rates rise
• A sense of security, especially for a first home

A variable rate can go up or down depending on the market. The payment or the interest portion can thus change along the way (that’s the “variability”).

Quick advantages:

• Often lower than the fixed rate at the start
• Potential savings if rates fall
• More flexibility if you change strategy along the way

If you’re planning to move before the term ends, the break penalty becomes crucial. With a variable rate, the penalty is often limited to about three months’ interest. With a fixed rate, it can be much higher, because the bank recovers the difference between your rate and the market rate for the rest of the term.

Are you choosing between a fixed rate, a variable rate, and the term of your mortgage? Write to me: we’ll analyze your project and build together the smartest strategy for your situation.