Whereas a variable mortgage rate will change with fluctuations in the market, a fixed-rate mortgage always stays the same. With a fixed-rate mortgage, your interest rate always stays the same, locked at whatever you agreed upon in the terms of the loan.
Unlike a variable-rate mortgage, fixed-rate mortgages do not always come with a five-year agreement term. A fixed-rate mortgage can last one year, two years, or even ten years before having to be renewed.
Fixed-rate mortgages tend to be the most popular option since they pose a lower risk for borrowers. Of all the mortgages in Canada, nearly three-quarters of them are fixed-rate.
Variable-rate mortgages may be less popular, but they are no less worth considering. They may be prone to market fluctuations, but they also usually offer a lower overall interest rate, as lenders tend to view them as less risky.