Buying or renewing and stuck between a fixed and variable mortgage? You don't need to predict rates. Here are the questions that actually help you decide. Published: Oct 14, 2026 (blog + Google post)
Your renewal letter shows up. Or you've just had an offer accepted on your first home. Either way, the same question hits:
Fixed or variable?
You ask your brother-in-law. He says variable, obviously. Your coworker says she locked in and sleeps like a baby. Someone on Facebook is sure rates are about to drop. Someone else is sure they're about to jump.
If you feel stuck, you're not alone. In a Royal LePage survey from this summer, 39% of Canadians renewing a fixed-rate mortgage said they still hadn't decided what to do next. And about one in three said they feel more anxious about this renewal than their last one.
Here's what I tell my clients: you don't need to predict rates to make a good decision. Nobody can do that reliably. Not me, not the banks, not the guy on Facebook.
What you can do is pick the mortgage that fits your life. Here's how.
The quick difference
- Fixed: your rate and payment stay the same for the whole term. You know exactly what's coming out every month.
- Variable: your rate moves with your lender's prime rate. When prime goes down, you pay less interest. When it goes up, you pay more.
Neither one is "better." They're built for different people.
Wait, variable or adjustable? They're not the same
This one trips up a lot of people, because lenders use both words and they work differently.
- Adjustable rate: when prime changes, your payment changes too. Rates go up, your payment goes up right away. Rates go down, your payment drops. What you see is what's happening.
- Variable rate (with a fixed payment): when prime changes, your payment stays the same. What changes is how much of that payment goes to interest and how much goes to paying down your mortgage. Rates go up, more of your payment goes to interest and less comes off your balance.
That second one feels safer because your payment doesn't move. But it's the one that surprised a lot of homeowners when rates climbed in 2022 and 2023. Their payment looked the same, but some were barely paying down their mortgage at all, and some lenders eventually raised their payments anyway.
Neither is wrong. Just know which one you have, or which one you're signing up for. Ask your lender: "If prime goes up, does my payment change, or just my interest?"
Question 1: How much wiggle room is in your budget?
Be honest here. Groceries, gas, insurance and everything else costs more than it did five years ago.
If your rate went up and your payment (or the interest you're paying) went up with it, could you handle it without losing sleep or pulling out the credit card?
- Not much wiggle room? Fixed gives you certainty. That's worth something.
- Some breathing room? Variable is an option worth looking at.
Question 2: Could your life change in the next few years?
This is the question most people skip, and it's the one that can cost the most.
Think about the next five years. Could you sell? Move for work? Go through a separation? Need to pull equity out to renovate or pay down debt?
If there's a real chance you'll break your mortgage early, the penalty matters more than the rate.
- Variable: the penalty is usually three months' interest. Predictable.
- Fixed: the penalty is usually the greater of three months' interest or something called the interest rate differential (IRD). Depending on the lender, the IRD can run into the thousands, or the tens of thousands.
Two mortgages with nearly the same rate can have very different penalties. Always ask how yours is calculated before you sign.
Question 3: How do you feel when the news says "rates"?
Call it the sleep-at-night test.
Some people check the Bank of Canada announcement and shrug. Others feel their stomach tighten every time it comes up.
Neither one is wrong. But if a rate change would keep you up at night, the peace of mind from a fixed rate has real value, even if it costs a little more on paper.
If you do go variable, here's what I'd do
Set your payment as if you'd taken the fixed rate.
If the variable rate is lower, the difference goes straight to your principal. You pay your mortgage down faster, and you build a cushion in case rates rise later. If they do, your budget is already used to the higher payment.
You get the potential savings of variable with a lot less of the stress.
You have more than two options
It doesn't have to be "five-year fixed or nothing."
- Shorter fixed terms (like two or three years) give you certainty now and a chance to decide again sooner.
- Many variable mortgages let you lock into a fixed rate partway through the term if you change your mind. Ask your lender how it works and what rate you'd get.
If you're buying
The same three questions apply, with a few extras:
- Think hard about Question 2. Your first few years in a home are when life changes the most. New baby, new job, a bigger place. If there's a chance you'll sell or refinance before the term is up, the penalty deserves a close look.
- Fixed or variable doesn't change what you qualify for. You'll qualify at the stress test rate either way, so pick based on what fits your life, not on which one gets you approved.
- Ask about portability. If you move, can you take your mortgage with you to the next home? That can save you a penalty entirely.
If you're renewing: don't just sign the letter
The same survey found that about half of renewers plan to stay with their current lender. That's fine if it's the best deal. But a lot of people sign without ever comparing.
Your renewal is the one time you can move your mortgage to another lender without paying a penalty. And if you're simply switching lenders at renewal with no changes to your mortgage, you no longer have to pass the stress test to do it. Shopping around is easier than most people think.
The bottom line
Stop trying to guess where rates are going. Ask yourself:
- How much wiggle room is in my budget?
- Could my life change in the next few years?
- Will I sleep at night if my rate moves?
Your answers will tell you more than any rate forecast.
Buying or renewing in Maple Ridge, Pitt Meadows or Langley? Send me your renewal date or your buying timeline. I'll compare your options side by side, including what your penalty would look like, so you can decide with real numbers instead of a guess.
Survey data: Royal LePage, conducted by Burson, July 20 to August 6, 2026. Information current as of October 2026. This article is general information, not personalized mortgage advice. Every situation is different, so talk to a mortgage professional about yours.
Google Business post
Buying or renewing, and stuck between a fixed and variable mortgage?
You're not alone. A Royal LePage survey this summer found 39% of Canadians renewing a fixed-rate mortgage still hadn't decided.
You don't need to predict rates to make a good choice. Ask yourself three things:
- How much wiggle room is in my budget?
- Could my life change in the next few years? (Penalties matter more than you think.)
- Will I sleep at night if my rate moves?
I break it all down in this week's blog, including the difference between variable and adjustable (they're not the same) and the one thing I'd do if you go variable.
Button: Learn more → link to the blog post