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Nov. 2021 – 15 min read

When you borrow money to purchase a home, the loan is called a mortgage. The percentage of interest the lender charges you to borrow the money is called the mortgage rate. 

With a fixed-rate mortgage, the interest rate and your mortgage payment will remain the same throughout your mortgage term. 

The mortgage term is the length of time you commit to a particular type of mortgage. It can range from 6 months to 10 years. 

A fixed-rate mortgage might be for you if:

Fixed mortgage rates are driven mostly by Canadian bond yields, which are influenced by economic factors like unemployment, exports and inflation.

According to Mortgage Professionals CanadaOpens a new website in a new window, about 77% of all mortgages are fixed rate, while the remainder are variable rate (18%), or a combination of fixed and variable rate (5%).

If you like knowing your mortgage payment will stay the same, regardless of if mortgage rates rise or fall, then a fixed-rate mortgage is your best choice. 

However, if some financial uncertainly doesn’t scare you, because they’ve historically proven to be less expensive, a variable-rate mortgage may be your best choice.

You can change your mortgage rate type at the end of your term when you renew your mortgage. 

Some lenders also allow you to convert your variable rate to a fixed rate during your initial term.  

As well, some mortgage lenders offer mortgages that are part fixed rate and part variable rate, so that may be an option as well.

Now that you understand more about fixed rate mortgages, you may want to contact your advisor and a credit planning consultant to:

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October 21, 2019