The Great Debate: Fixed or Variable?

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

Market Pulse

Canada

July 2, 2026

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Compare fixed and variable mortgage rates before choosing your rate type

Fixed mortgage rates offer payment stability, while variable mortgage rates can provide flexibility and potential savings when rates move lower. Use RateBuddy to compare fixed and variable options side by side across popular terms before deciding which rate type fits your budget, timeline, and risk comfort.

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.

Fixed vs. Variable Rates

Live as of: July 2, 2026 | Canada

Customize your fixed vs variable mortgage comparison

Enter your purchase price, down payment, and amortization to compare fixed and variable mortgage rates across popular terms. RateBuddy helps show the payment and rate differences side by side so you can choose the structure that fits your plans.

Term	Fixed Rate	Variable Rate
5 Years	3.89% 5-Year · Fixed Costs $5,441 more than Variable over 5 Years Monthly Pmt $1,487 Interest Cost (5 Year) $51,989 Inquire	3.30% 5-Year · Variable Save $5,441 vs. Fixed over 5 Years Monthly Pmt $1,396 Interest Cost (5 Year) $43,878 Inquire
4 Years	4.24% 4-Year · Fixed Monthly Pmt $1,542 Interest Cost (4 Year) $46,082 Inquire	Rate Not Available
3 Years	3.99% 3-Year · Fixed Costs $2,184 more than Variable over 3 Years Monthly Pmt $1,503 Interest Cost (3 Year) $32,907 Inquire	3.60% 3-Year · Variable Save $2,184 vs. Fixed over 3 Years Monthly Pmt $1,442 Interest Cost (3 Year) $29,632 Inquire
2 Years	4.24% 2-Year · Fixed Monthly Pmt $1,542 Interest Cost (2 Year) $23,632 Inquire	Rate Not Available
1 Year	4.10% 1-Year · Fixed Monthly Pmt $1,520 Interest Cost (1 Year) $11,560 Inquire	Rate Not Available
7 Years	4.97% 7-Year · Fixed Monthly Pmt $1,661 Interest Cost (7 Year) $91,355 Inquire	Rate Not Available
10 Years	5.29% 10-Year · Fixed Monthly Pmt $1,715 Interest Cost (10 Year) $133,483 Inquire	Rate Not Available

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.

Mortgage Rates by Lender

Compare rates from Canada's top banks and credit unions.

RBC

RBC Royal Bank Big 5 Bank

TD Canada Trust Big 5 Bank

BNS

Scotiabank Big 5 Bank

BMO

BMO Bank of Montreal Big 5 Bank

CIBC

CIBC Big 5 Bank

NBC

National Bank Major Bank

ING

Tangerine Digital Bank

ATB

ATB Financial Alberta Focus

DES

Desjardins Credit Union

MER

Meridian Credit Union

Connect First Credit Union

First West Credit Union

Best Rates by Province

Compare regional lending criteria and exclusive local offers.

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How to compare fixed vs variable mortgage rates in Canada

Fixed and variable mortgage rates work differently. A fixed rate stays the same during the mortgage term, while a variable rate can move when lender prime rates change. The better choice depends on your need for payment stability, flexibility, risk comfort, and your expectations for future rate changes.

When fixed mortgage rates may make sense

Fixed rates may suit borrowers who want predictable payments, are sensitive to payment changes, or prefer to lock in their rate for the full term. A fixed mortgage can make budgeting easier, especially when interest rates are uncertain.

When variable mortgage rates may make sense

Variable rates may suit borrowers who are comfortable with rate movement, want more flexibility, may sell or refinance before the end of the term, or believe rates could move lower. Variable mortgages may also have different penalty rules than fixed mortgages.

How to use this comparison table

Compare the fixed and variable rate columns by term, then use the filters to estimate payments for your purchase price, down payment, and amortization. Before applying, confirm the lender’s rate type, payment rules, prepayment options, penalties, and eligibility requirements.

Your Comparison Questions, Answered

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

What is APR (Annual Percentage Rate)? How does the Stress Test affect my choice? Should I choose a Bank or Credit Union? Is the lowest rate always the best deal? What are Prepayment Privileges?

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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