What is the difference between a fixed-rate mortgage and a variable-rate mortgage?
• Fixed-Rate Mortgage: A mortgage for which the rate of interest is fixed for a specific period of time (the term). Payments will remain stable throughout the life of the loan. • Variable Rate Mortgage: A variable rate mortgage is a mortgage that has fixed payments, but the interest rate fluctuates with any changes in the Bank of Canada prime lending rate. If interest rates go down, more of the payment goes to principal. If interest rates go up, more of the payment goes towards the interest. ***Tip: Choosing a fixed or variable mortgage is very dependent on personal circumstances and preferences. There really is no one clear cut best choice for everyone. For some, the prospect of saving significant interest with a variable is worth the volatility that a variable rate mortgage can present. For others, getting a great rate locked in for a fixed period of time with no chance of that rate fluctuating is clearly the more attractive option. You should always evaluate both options and you sho
