Fixed vs Variable Mortgage Rates: Which Is Best for You?

Understand the pros and cons of fixed and variable rate mortgages so you can make a confident choice.

Key Takeaway

A fixed mortgage rate offers payment stability, while a variable rate offers potential savings—but with more risk. The right choice depends on your budget, financial goals, and risk tolerance.

What Is a Fixed Mortgage Rate?

A fixed mortgage rate stays the same for the entire term of your mortgage, typically between one and ten years.

Benefits of a Fixed Rate

• Predictable monthly payments

• Easier to budget long-term

• Peace of mind, especially in volatile markets

When to Choose a Fixed Rate

• You’re a first-time buyer

• You have a fixed income or tight budget

• You value stability over potential savings

What Is a Variable Mortgage Rate?

A variable mortgage rate fluctuates with the market—meaning your payments can rise or fall depending on interest rate changes.

Benefits of a Variable Rate

• Often starts with a lower interest rate

• Potential to save if market rates stay low

• Flexible for those with higher risk tolerance

When to Choose a Variable Rate

• You’re financially stable with room in your budget

• You plan to sell or refinance in a few years

• You’re comfortable with market shifts

How to Decide Between Fixed and Variable

Questions to Ask Yourself

• Are you staying in this home long-term?

• Can you handle payment increases?

• Do you want peace of mind or potential savings?

Your answers can guide you toward the best fit for your lifestyle and goals.

Final Thoughts

Both fixed and variable mortgage rates have their advantages. The best choice depends on your current situation and future plans.

Want to explore your options? Use our Mortgage Calculator to see what works best for your budget, or call (416) GET-ALDO for expert advice. We're here to help you choose confidently.