One of the key considerations is whether a fixed interest rate mortgage or a variable interest rate mortgage may be right for you. We explain a few of the key differences.
Fixed interest rate mortgageWhat this means: This type of mortgage is a loan for which the rate of interest is fixed over a specific period of time (the term) and will not change.
Benefits: For many, the biggest benefit is peace of mind, since you can be certain that your interest rate won't increase during the mortgage term you select.
Important to know: Whatever happens in the financial markets or with interest rates, your agreed-upon rate stays the same.
Variable interest rate mortgageWhat this means: This kind of mortgage has an interest rate that may fluctuate up or down during the term, whenever the base rate changes.
Benefits: If the base interest rate goes down during the term, you could pay less in interest than with a fixed interest rate mortgage.
Important to know: Some mortgage options may allow you to convert to a fixed rate during the term if, for example, you are concerned that the base rate may begin to climb.
Keep in mind that there’s much more to choosing the right mortgage than rates alone. Having access to flexible mortgage features and repayment terms can be valuable in many ways, and even help save you money over the span of your mortgage