Strategy · 7 min read
Fixed vs Variable: Which Suits Your Next Term
The right answer depends less on rate forecasts and more on your personal cash flow, timeline, and risk tolerance.
Fixed-rate mortgages offer payment certainty for the full term. Variable-rate mortgages tie your interest cost to the Bank of Canada's overnight rate, with payments that may move up or down depending on lender structure.
Historically, variable rates have outperformed fixed over long periods - but recent cycles have shown how quickly that can reverse. The honest answer is that no one knows where rates will be in three years. The better question is how much payment volatility your household can comfortably absorb.
Hybrid mortgages, which split the balance between fixed and variable portions, are an underused middle path. They are not right for every situation - but for households with strong cash flow and split risk preferences, they can offer balance.