Rate Comparison FAQ
Fixed vs. Variable Rates
One of the first questions every borrower faces: fixed or variable? Here’s the short version.
Understanding Your Options
Fixed rate
Your interest rate and payment stay the same for your entire term.
Pros
- Predictable payments
- Easy to budget
- You’re protected if rates rise
Cons
- Usually a higher cost to break early
- You don’t benefit if rates fall
- Often starts a little higher than variable
Variable rate
Your rate moves up or down with your lender’s prime rate.
Pros
- Often lower over time
- Smaller penalty to break early (usually about three months’ interest)
- You benefit right away if rates drop
Cons
- Your payment — or how much of it goes toward principal — can change
- Harder to budget
- Rising rates can add stress
One quick note: Some variable mortgages keep your payment steady and adjust how much goes to principal, while others change the payment itself when prime moves. It’s worth knowing which type you’re being offered.
So which is right for you?
There’s no universal “better.” It comes down to three things:
1
How much flexibility your budget has if payments change
2
How comfortable you are with some uncertainty
3
Whether you might move or refinance before the term ends
Not sure which fits?
That’s exactly the kind of decision I help you think through. Book a call and we’ll look at your numbers together.