Fixed or variable: how to choose your mortgage rate type
Doorvia Guides · August 20, 2026
Fixed rates buy certainty and carry higher penalties; variable rates follow prime and can change your payment or amortization.
A fixed-rate mortgage locks your rate and payment for the term. A variable-rate mortgage moves with the lender's prime rate. Some variable products keep the payment steady and shift the split between interest and principal, while others adjust the payment itself.
The trade-off is not only about predicting rates. Break penalties differ sharply: fixed mortgages at the big banks often use an interest rate differential calculation that can be expensive, while variable penalties are typically three months' interest.
If there is any chance you will move, refinance or sell mid-term, factor the penalty structure and the portability rules into the decision, not just the headline rate.
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