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  • Writer's pictureDouglas Paterson

Fixed vs Variable Rate Mortgage In Canada. How to know which is better for you!

Updated: Mar 31, 2021

Rates fluctuate and hindsight is always 20/20. However their is one key element that is critical to making the best decision to this age long question. Best part is, the answer is within your grasp!

Fixed rate mortgages appeal to folks who prefer stability in their payments, manage a tight monthly budget, or are generally more risk averse. For example, young partners with large mortgages might be better off opting for the peace of mind that comes with a fixed-rate.

Ontario homebuyers guide Dominion Lending Centres

A variable rate mortgage allows the borrower to take advantage of lower rates – the interest rate is calculated on an ongoing basis at a lenders’ prime rate minus or plus a set percentage. For example, if the current prime mortgage rate is 5.5 percent, the holder of a prime minus 0.5 percent mortgage would pay a 5.00 percent variable interest rate.

As a consumer, the best option is to have a candid discussion with your mortgage professional to ensure you have a full understanding of the risks and rewards of each type of mortgage.

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At the end of the day what matters is your own personal piece of mind. What will allow you to sleep best at night? Essentially that is the answer! However, arriving at a final decision requires you to have solid understanding of both your level of risk as well as your current and future expected financial circumstances. Be honest with your yourself and perhaps speak with a professional to help you weight the pros and cons from the perspective of your unique situation.

Doug Paterson, Mortgage Agent

Dominion Lending Centres.

416.432.8836 |


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