Fixed or Variable Rate Mortgage: Which One is Right for You? Factors to Consider When Making Your Decision.
Choosing between a variable-rate mortgage and a fixed-rate mortgage can be challenging. A variable-rate mortgage's interest rate may fluctuate during the mortgage term based on the overnight lending rate determined by the Bank of Canada. A fixed-rate mortgage has a stable interest rate for the mortgage term. Benefits of a variable-rate mortgage include historically lower rates, flexibility when breaking the mortgage, and potential savings if rates drop. Disadvantages include fluctuating payments and lack of portability for some products. Benefits of a fixed-rate mortgage include budgeting stability, portability, and blending rates. Disadvantages include paying more interest if rates go up and higher prepayment penalties. Contact us at 647-773-4849 for assistance in determining the right option for you.
