A key consideration when acquiring a mortgage is whether to opt for a Fixed Rate or Adjustable Rate Mortgage. Outlined below are the key differences between them.
Fixed Rate Mortgages
Interest rates and payments are fixed for the duration of the mortgage term.
Homeowners who want predictable & stable payments for their mortgage term.
Fixed payments allow you to stick to a consistent budget.
You would need to refinance to take advantage of low rates.
Adjustable Rate Mortgages
Interest rates and payments adjust along with the prime rate.
Homeowners who are comfortable with payment fluctuations to possibly gain long-term interest savings.
Often feature lower rates and payments.
Increases in the prime rate will increase your payments & interest payable.
Adjustable Rate Mortgages & Prime Rate Changes
Interested in learning more about how Adjustable Rate Mortgages are impacted by the Bank of Canada’s changes to its Policy Interest Rate? View our informative resource here: