Investing in a property, home building or renovation requires a lot of planning on your finances. You will have to compare the mortgage rates on loans to comprehend the best option for yourself, based on your needs and expectations. It is also necessary to understand which product suits your spending profile and the pros and cons between variable and fixed mortgage rates.

Variable Mortgage Rate:

The variable mortgage rate can vary over the period of your repayment based on the prime rates set by the banks, which could be revisited by the Bank of Canada multiple times a year, thus automatically readjusting your mortgage rate.


  1. A drop on the prime rate will readily give you a plunge in the mortgage you pay to your financial institution. For example, the year 2020 witnessed a drop of 1.50% lower rate than the previous year. So, anyone opting for a variable mortgage rate has paid 1.50% less in interest year-to-date.
  2. A variable mortgage rate gives you the choice to switch to a fixed rate with usually no penalties, which may not be the case the other way around.
  3. A variable rate is seen as a lower cost option due to lower penalties you must pay should you need to break your mortgage before it matures. The penalty to break your variable rate mortgage is the interest incurred in the last 3 months.


The Bank of Canada can increase the variable rate any time. So, any increase over the break-even point will lead to a substantial economic loss.

Fixed Mortgage Rates:


  1. You will be paying a consistent amount towards your mortgage at least until the end of your term.
  2. If you are absolutely certain there is no reason for you to break your mortgage, then this is the option for you.


  1. You may think that fixed mortgage rates are safe because you know how much you will pay each year. However, this may lead to paying more on interest. This can happen when the interest rates in a given year over the course of your term have gone down. You will pay what you agreed to, without benefitting from the drop in interest rates.
  2. You can never substitute a fixed rate with a variable rate plan over your agreed term because if you do, you will pay a heavy penalty set by your financial institution.
  3. A lot of circumstances like your financial or personal situation may land you into breaking a fixed mortgage rate and this can come costly to you in the future. The penalty on breaking a fixed mortgage can be 3 months of interest or the ‘Interest rate differential’ which is an interest estimated up to the maturity of the term.

Below are the variable and fixed rate percentages offered currently:

  1. Low 5 Years Variable Mortgage Rates

You can pay just 1.25% mortgage rate on an annual basis on your principal amount for a plan of payment over five years. The 1.25% mortgage rate is variable, on which standard terms and conditions apply approved by the financial institutions.

  1. The 5 Years – High Ratio Mortgage Rates

The mortgage rate can go for as low as 0.99%, however it is a promotion for purchases with less than 20% down payment and is available for a limited time. This may also be subject to an estimation of your monthly savings that are calculated as per the rates set on

  1. Short-term – Fixed Mortgage Rates

There are various options for fixed mortgage rates depending on the term that you select. Please consult our rates section for further information as rate offerings can change frequently.

It is always advisable to consult the mortgage experts. Feel free to contact us today!