Often lower vs. fixed, but interest rate amount can change during term.

THE PROS: Save More

• Likely save more on interest over your mortgage term compared to a (higher) fixed rate
• If rates go down, you'll pay less interest for a budget break
• If rates go up, you may still save more over a fixed rate
• Lower penalties for breaking or switching (3 months interest vs IRD with fixed rate)
• Historically, variable rates tend to outperform fixed rates for savings

THE CONS

• If rates go up, your payment can increase, affecting your monthly budget
• If rates go up, you'll pay more interest
• Some variable rate products aren't portable (transferable from a current property to a new one) if you sell the home during your term
• You may worry more about rates rising during your term

Often higher vs. variable, but interest rate amount is fixed during term.

THE PROS: Stress Less

• Rate is set for the duration of your mortgage term
• Payments and interest won't change, making it easier to budget
• If rates go up during your term, you're protected
• Fixed-rate terms are usually portable (can go from current property to a new property)
• You may feel more peace of mind if rates rise during your term

THE CONS

• Higher penalties for breaking or switching (Interest Rate Differential (IRD) or 3 months interest, whichever is greater)
• Historically, fixed rates are higher than variable rates, which may cost you more
• If rates go down during your term, you'll need to refinance or wait for your renewal to take advantage