Variable or Fixed Mortgage: Which Is Best for You?

If you’re buying a home, one of the biggest decisions you’ll make is whether to take a fixed-rate or variable-rate mortgage. With headlines constantly predicting where rates are going next, it’s easy to feel stuck.

In this video, the Right Choice team breaks down how to approach the decision, and why who you get your mortgage from matters as much as which mortgage you choose.

Fixed vs. variable: the basics

• Fixed-rate mortgage: your interest rate stays the same for the whole term, so your payment is predictable.
• Variable-rate mortgage: your rate moves with the lender’s prime rate. If rates drop, you benefit. If they rise, your costs go up.

Neither is automatically better. The right choice depends on your budget, how long you plan to stay in the home, and how comfortable you are with your payment changing.

Why the bank may steer you toward a fixed rate

Here’s something buyers don’t always hear. When you walk into a bank, you may be nudged toward a fixed rate, which is often a more profitable product for the lender. The bank’s job is to make money for the bank. That isn’t necessarily the best fit for you.

Why a mortgage broker can help

A good mortgage broker works with many lenders, not just one. They can:

• Lay out every option available to you
• Explain the risks and potential rewards of fixed versus variable
• Compare terms, penalties and flexibility side by side

That way you’re making an educated decision that puts you and your family in the best financial position, not just taking whatever the first lender offers.

Questions to ask before you choose

1. How long do I plan to stay in this home?
2. Could my budget handle a payment increase if rates rise?
3. What are the penalties for breaking the mortgage early with each option?
4. Is a shorter term or an open mortgage worth considering?

Shopping for builder incentives

The team also notes that in a slower market, some builders offer special incentives, including discounted mortgage rates on move-in-ready homes. Incentives like these come and go, so it pays to work with an agent who knows what’s available right now.

Buying a home in Niagara?

Right Choice works with trusted local mortgage professionals and can connect you with someone who will lay out all your options.

Call 289-276-1716 or get started here.