Variable Rate Mortgages provide more flexibility and the opportunity to take advantage of an even lower rate when rates decrease.

The rate is based on the banks prime rate (which is currently 3.95%), in which a bank discount is given from that. A variable rate is adjusted immediately when there is a bank prime rate increase or decrease.

With most prime lenders and banks, the ratio between principal and interest will change up or down changing the total amount of the payment. This is something to consider when opting to go with a variable rate mortgage.

This mortgage is fully convertible at any time without any cost to you. This means that you have the ability to flip this mortgage into a fixed rate at anytime no penalty into a term equal to a greater than the existing term that you’re in. 95% financing is permitted with this product.

75% of Canadians choose a fixed rate mortgage

With a fixed-rate mortgage, the interest rate is set for the term of the mortgage, so that the monthly payment of principal and interest remains the same throughout the term. The available fixed mortgage terms are 1,2,3,4,5,7 & 10 year.

Regardless of whether rates move up or down, you know exactly how much your payments will be and this simplifies your personal budgeting. If you don’t like the idea of your payment changing during the course of your term regardless of how small and you want to know exactly how much principal & interest you’ll be paying for the term, than a fixed rate mortgage would be best suited for you.