What are the Pro’s & Con’s to a Fixed Vs Variable Rate?

Author: Boychuk Mortgage Group |

  • Fixed Rate Mortgage Pro’s
  • Fixed rates give the borrower the certainty of a static payment each month.
  • In a rate rising environment, your payment will not move.
  • Fixed Rate Mortgage Con’s
  • Fixed rates are less flexible & result in larger penalties if you break your mortgage
  • Once you choose a fixed rate mortgage, you cannot move over to a variable
  • Variable Rate Mortgage Pro’s
  • Variable mortgages will provide borrowers with the most flexibility.
  • A variable mortgage payment may go up, but it can also go down
  • A variable mortgage rate is typically offered at a lower rate than fixed
  • The variable rate mortgage has historically outperformed the fixed rate mortgage
  • Borrowers can qualify for more typically in a variable mortgage
  • Once you choose a variable rate mortgage, you move over to a fixed anytime
  • Variable Rate Mortgage Con’s
  • A variable mortgage payment may go down, but it can also go up
  • Variable rates are a little more complex as the rate is based off of the prime rate