Fixed vs. Variable Mortgage Decision Tool
Compare illustrative fixed and variable payment, term-interest, break-even, and risk-tolerance scenarios without predicting rates.
Before you use this tool
What it estimates
Compare illustrative fixed and variable payment, term-interest, break-even, and risk-tolerance scenarios without predicting rates.
Who it is for
Canadian borrowers comparing the structure of entered fixed and variable mortgage offers.
Numbers you need
Mortgage amount, amortization, term, fixed-rate offer, variable-rate offer, and three risk-tolerance answers.
What the result means
The tool compares constant-rate illustrations, term interest, break-even math, and a descriptive risk profile without forecasting rates or recommending a product.
Next step
Use the scenarios to identify questions about payment behavior, penalties, privileges, and contract terms before choosing an option.
Review my rate scenariosA practical time to review
Lenders often send renewal offers roughly 90 to 120 days before maturity. Reviewing the written offer when it arrives may leave more room to compare the rate, payment, term, privileges, and switching requirements. Timing varies by lender and mortgage; this is a planning window, not a deadline.
Offer details / Détails des offres
Enter rates from actual offers. The calculated variable rate is 4.45%. This tool does not supply, predict, or recommend a future rate.
Your risk-tolerance inputs / Votre tolérance au risque
Fixed monthly payment
$2,849
At 4.79% using semi-annual compounding. Illustrative scenarios only, not a rate forecast or mortgage advice.
Variable flat-scenario payment
$2,765
At 4.45% using the monthly-compounding illustration. Illustrative scenarios only, not a rate forecast or mortgage advice.
Variable-rate illustrations over the selected term
Each row assumes the displayed rate applies for the entire term and the payment adjusts to preserve the entered amortization. Fixed-payment variable products may behave differently.
Illustrative scenarios only, not a rate forecast or mortgage advice.
Break-even illustration
In this constant-rate illustration, variable term interest matches fixed term interest at about 4.74%, or 0.29 percentage points above the entered variable rate.
This compares estimated interest over the selected term at constant rates. It excludes penalties, fees, privileges, product features, and any future rate path.
Illustrative scenarios only, not a rate forecast or mortgage advice.
Compare two entries
Save two scenarios side by side
Save the current calculator results as A, change the inputs, then save the next results as B. These browser-only snapshots repeat the tool’s existing illustrations; they do not add a forecast or recommendation.
| Detail | Scenario A | Scenario B |
|---|---|---|
| Mortgage amount | — | — |
| Amortization | — | — |
| Term | — | — |
| Fixed-rate offer | — | — |
| Variable-rate offer | — | — |
| Fixed monthly payment | — | — |
| Variable flat-scenario payment | — | — |
| Fixed term interest | — | — |
| Variable flat-scenario interest | — | — |
| Break-even variable rate | — | — |
| Descriptive risk fit | — | — |
Saved scenarios stay in this browser. They are educational estimates based on the inputs entered and are not lender quotes or approvals.
Descriptive risk fit
mixed
Your answers balance payment stability with flexibility considerations. This describes the answers entered; it does not recommend a fixed or variable mortgage.
Many closed variable contracts use a penalty based on three months' interest. A fixed penalty may include an interest rate differential and can be larger. Contract wording varies, so obtain a written penalty estimate before breaking a mortgage.
Check what you may qualify for at the stress-test rateIllustrative scenarios only, not a rate forecast or mortgage advice.
Frequently asked questions
What is the difference between a fixed and variable mortgage in Canada?
A fixed mortgage keeps its contract rate unchanged for the selected term, while a variable rate moves with the lender's prime rate and the adjustment stated in the contract. Payment behavior, compounding, privileges, and penalties can differ by product. The mortgage renewal savings calculator can compare entered rate scenarios, but neither tool predicts which structure will cost less.
How do variable mortgage payments respond when prime changes?
Some variable mortgages adjust the required payment when prime changes, while fixed-payment variable products may initially change how much of each payment goes to interest and principal. Trigger-rate or amortization consequences may eventually require action. This calculator illustrates an adjustable payment at a constant scenario rate; actual payment mechanics, compounding, and notices depend on the mortgage contract and lender.
What happens to a variable mortgage if rates rise?
A higher variable rate typically increases interest cost. With an adjustable-payment product, the required payment may rise; with a fixed-payment variable product, less may go to principal and trigger provisions may apply. The GDS/TDS calculator can illustrate how a higher qualifying payment affects debt ratios. These are estimates only, and the lender's contract determines the actual response.
Are penalties different when breaking a fixed or variable mortgage?
Many closed variable-rate contracts use a charge based on three months' interest, while a fixed-rate penalty may use the greater of three months' interest or an interest rate differential and can be larger. This is not universal. Posted-rate methods, discounts, remaining term, privileges, portability, and lender wording matter, so request a written payout statement before making a decision.
Does the mortgage stress test differ for fixed and variable rates?
The qualifying calculation generally considers the applicable mortgage contract rate and the current minimum qualifying-rate rules; product and transaction details can affect treatment. A lower offered variable rate does not guarantee a larger approval. Use the GDS/TDS calculator to explore a qualifying-rate scenario, then confirm the rate, ratios, and documentation requirements with the lender or mortgage professional.