How do fixed and variable rates compare?
Choosing between a fixed or variable rate depends significantly on the economic outlook.
Key Points
Your variable rate will move up or down when the Bank of Canada changes its rate, affecting your mortgage payments.
With a fixed interest rate, your mortgage payments stay the same for the entire term, which can help you budget.
Keep an eye on the interest rates that banks post each week for different types of mortgages.
Looking at past interest rates can give you a better idea of how rates change over time.
You can find data on the difference between rates for different mortgage terms (like 1, 3, and 5 years).
Technical Research Verification
Our systems synchronized 4 data points and regulatory frameworks to verify this technical brief.
Related Questions
How does the stress test differ for fixed vs. variable in 2026?
Both are stress-tested at the higher of the benchmark (5.25%) or the contract rate + 2%.
Why are 3-year fixed rates dominating the 2026 market?
Borrowers are hesitant to lock in for 5 years at current levels, but find 1-2 year rates too expensive.
Fixed vs. Variable Comparison Table
Fixed locks a 5-year rate with IRD penalty risk; variable floats with prime and typically caps break fees at 3 months interest.
What is the 'IRD' penalty risk for 5-year fixed borrowers?
The Interest Rate Differential (IRD) can cost tens of thousands if you break a fixed mortgage when market rates have dropped.