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Fixed Rate VS. Variable Rate

The decision to choose a fixed or variable rate is not always an easy one. It should depend on your tolerance for risk as well as your ability to withstand increases in mortgage payments.

A Comparative Insight

When deciding on a mortgage, the choice between Variable and Fixed Rates involves balancing potential financial gains with the appeal of stability. Variable Rates offer the possibility of financial advantages, dependent on economic fluctuations, while Fixed Rates provide predictability and peace of mind in monthly payments. The decision rests on individual circumstances, urging consideration and discussion with a mortgage professional to grasp the associated risks and rewards.

Fixed Rate


Variable Rate

  • Stability and Predictability: Fixed Rate mortgages are often favored by those seeking stability in payments. This option is suitable for individuals managing a tight monthly budget or those inclined towards a conservative approach.

  • Peace of Mind: Young couples with substantial mortgages relative to their income might find solace in the predictability offered by a Fixed Rate mortgage, providing peace of mind amid economic uncertainties.

  • Prospective Financial Rewards: Opting for a Variable Rate mortgage can sometimes yield financial benefits. However, the extent of this advantage fluctuates with the economic climate.

  • Interest Calculation: Variable rates are calculated based on the lender's prime rate, adjusted periodically by a set percentage. For instance, if the current prime mortgage rate is 5.5 percent, a mortgage holder with a prime minus 0.5 percent arrangement would have a 5.00 percent variable interest rate.

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