# How do fixed and variable rates compare?

> Choosing between a fixed or variable rate depends significantly on the economic outlook.

Category: Strategy
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/strategy/how-do-fixed-and-variable-rates-compare

## Answer
Here's a quick comparison:

| Feature           | Fixed Rate                        | Variable Rate                       |
|-------------------|------------------------------------|------------------------------------|
| Payment Stability | Consistent throughout the term    | Fluctuates with prime rate changes |
| Risk              | Lower risk, predictable budgeting | Higher risk, potential savings     |
| Best For          | Risk-averse borrowers              | Borrowers comfortable with risk      |

## Institutional highlights
- 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).

## Related guide
- https://ratellow.com/guides/fixed-vs-variable-historical

## Sources
- Weekly series — https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/#table
- Notes — https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/#notes
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Contents — https://www.sagen.ca/ups/underwriting-documentation/#documentation