A fixed-rate mortgage offers home owners predictable payments. How does it compare to a variable rate? Learn how fixed-rate mortgages work in the MoneySense Glossary.
A fixed-rate mortgage has the same interest rate throughout the mortgage term. (The other option is a variable-rate mortgage, whose interest rate fluctuates with the lender’s prime rate.) The mortgage term is typically five years.
Fixed-rate mortgages are often a good choice for home owners who want predictable future payments, or who expect interest rates to rise over the term of the mortgage.
Example: “Iqbal heard that interest rates were expected to rise, so he chose a fixed-rate mortgage to lock in at the current interest rate.”
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
What is Canada’s First-Time Home Buyer Incentive program and...
Adyen’s Canadian manager tackles the My MoneySense questionnaire, revealing...
Thinking about buying or selling a home in Canada?...
Banks collapse, U.S. inflation puts the Fed in a...
Find out if you can use the RRSP home-buying...
Markets nervous over central banks, Campbell Soup and Dick’s...
You have so many options for finding the best...
What the big banks are reporting, why Buffett’s letter...
Canadian entrepreneur and Dragons’ Den star Wes Hall talks...
