RateReset Canada guide
Fixed versus variable mortgages at renewal
Compare rate paths, payment behaviour, penalties, and budget tolerance at renewal.
The products behave differently
A fixed rate locks the contractual rate for the term. A variable rate changes with the lender’s prime-linked formula. Depending on the product, the payment may change or the principal-interest mix may change until a trigger is reached.
The decision is therefore about cash-flow behaviour and contract terms as much as the starting rate.
Use rate paths, not a single forecast
Model a flat path, a rising path, and a falling path. Compare total interest and remaining balance under each. No public calculator can know future Bank of Canada decisions or lender pricing.
Read the exit terms
Fixed penalties may include an interest rate differential. Variable penalties are often described as three months’ interest, but the contract governs. Portability, blend-and-extend, and conversion features can matter when plans change.
Estimates are for educational purposes and may differ from lender calculations, contractual terms, taxes, fees, or regulatory requirements. Read the full disclaimer.
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Methodology version: mortgage-methodology-2.0. See the editorial policy and corrections process.