The Great Debate: Fixed or Variable?

Compare the stability of fixed rates against the potential savings of variable rates side-by-side.

Compare Both
Market Pulse
Canada
May 2026
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Fixed vs. Variable Rates

Live as of: May 18, 2026 | Canada
Historical Context

The 5-Year Crossroads

See exactly when and why the market shifted. The chart below tracks the historical standard for 5-Year Fixed vs. 5-Year Variable rates over the last 5 years.

Today's Baseline Difference
Calculating...
*Reflects initial starting rates based on historical standard margins. Variable rates are subject to change.
%
 Years

Term Fixed Rate Variable Rate
5
Years
5-Year · Fixed
Costs $5,441 more than Variable over 5 Years
Monthly Pmt $1,487
Interest Cost (5 Year) $51,989
5-Year · Variable
Save $5,441 vs. Fixed over 5 Years
Monthly Pmt $1,396
Interest Cost (5 Year) $43,878
4
Years
4-Year · Fixed
Monthly Pmt $1,542
Interest Cost (4 Year) $46,082
Rate Not Available
3
Years
3-Year · Fixed
Costs $2,184 more than Variable over 3 Years
Monthly Pmt $1,503
Interest Cost (3 Year) $32,907
3-Year · Variable
Save $2,184 vs. Fixed over 3 Years
Monthly Pmt $1,442
Interest Cost (3 Year) $29,632
2
Years
2-Year · Fixed
Monthly Pmt $1,542
Interest Cost (2 Year) $23,632
Rate Not Available
1
Year
1-Year · Fixed
Monthly Pmt $1,520
Interest Cost (1 Year) $11,560
Rate Not Available
7
Years
7-Year · Fixed
Monthly Pmt $1,661
Interest Cost (7 Year) $91,355
Rate Not Available
10
Years
10-Year · Fixed
Monthly Pmt $1,715
Interest Cost (10 Year) $133,483
Rate Not Available
Recalculating...
Updating rates...

Look Beyond the Rate

The lowest rate isn't always the best mortgage.

A great mortgage has features that fit your life. Before you decide, check for these three key things:

  • Fair Prepayment Penalties Does the lender use a fair calculation if you need to break your mortgage early?
  • Generous Prepayment Privileges Can you make extra payments to become mortgage-free faster? Look for "15/15" or "20/20" options.
  • Mortgage Portability Can you take your mortgage with you to a new home if you move? This feature can save you thousands.

Your Comparison Questions, Answered

Get clear, professional answers to the most important questions when comparing mortgage options.

The Annual Percentage Rate (APR) is the most important number for an 'apples-to-apples' mortgage comparison. It represents the total cost of borrowing, including not just the interest rate but also most associated lender fees, expressed as a yearly rate. A mortgage with a slightly higher interest rate but lower fees could have a lower APR, making it the cheaper option overall.

The mortgage stress test is a federal rule that requires you to qualify at a rate higher than your actual contract rate. This ensures you can still afford your payments if rates rise. It's a crucial factor because it determines the maximum mortgage amount you can be approved for, which directly impacts which homes and rates are available to you.

It depends on your priorities. Big banks offer a wide range of products and national accessibility. Credit unions are member-owned, often providing more personalized service and sometimes more flexible qualification criteria. A mortgage broker is an excellent choice as they can shop your application to both banks and credit unions to find the best fit for your unique situation.

Not always. A mortgage with the absolute lowest rate might come with restrictive terms, such as very high prepayment penalties, no portability options (the ability to take your mortgage with you if you move), or limited customer service. It's essential to compare the features and flexibility of the mortgage, not just the interest rate.

Prepayment privileges are options that allow you to pay off your mortgage faster, saving you thousands in interest. They typically come in two forms: the ability to increase your regular payments (e.g., by 15%) and the ability to make annual lump-sum payments (e.g., up to 15% of the original principal). Generous prepayment privileges are a key feature of a high-quality mortgage.

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