Fixed Rate vs. Adjustable Rate Mortgages | MERIX Financial Skip to Main Content
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Fixed Rate vs. Adjustable Rate Mortgages

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

Description

Interest rates and payments are fixed for the duration of the mortgage term.

Ideal for

Homeowners who want predictable & stable payments for their mortgage term.

Advantages

Fixed payments allow you to stick to a consistent budget.

Disadvantages

You would need to refinance to take advantage of low rates.


Adjustable Rate Mortgages

Description

Interest rates and payments adjust along with the prime rate.

Ideal for

Homeowners who are comfortable with payment fluctuations to possibly gain long-term interest savings.

Advantages

Often feature lower rates and payments.

Disadvantages

Increases in the prime rate will increase your payments & interest payable.

Click Here for a Graphic Comparison Between Fixed and Adjustable Rate Mortgages

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:

Click Here for our Page on Prime Rate Changes