Fixed or variable-rate mortgage?
The interest rate on a fixed-rate mortgage is set for a pre-determined term – usually between 6 months to 10 years. This offers the security of knowing what you will be paying for the term selected.
A variable mortgage is a mortgage in which payments are fixed for the duration of your selected term. In this time, interest rates may fluctuate from month to month depending on market conditions. If interest rates go down, more of the payment goes towards reducing the principal; if interest rates go up, then a larger portion of the monthly mortgage payment goes towards covering the interest.