May 18, 20263 min read
For many Canadian homebuyers, this question comes up before they are ready to make an offer. The fixed-versus-variable decision is mainly about risk tolerance, cash-flow flexibility and how much certainty you value - not about guessing interest rates perfectly.
What lenders actually look at
Here is what matters most:
- A fixed rate provides predictable payments and interest for the term, which can make budgeting easier.
- A variable rate generally moves with lender prime and can create payment or amortization changes depending on the product design.
- Fixed mortgages can have larger break penalties in some circumstances, while variable penalties are often calculated differently.
- Your expected time in the home, plans to move and ability to handle payment changes should influence the decision.
Choose the structure you can live with if rates move in the direction you did not expect.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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