Fixed

A fixed-rate mortgage provides stability and peace of mind by locking in your interest rate for the length of your mortgage term. This means your principal and interest payments remain consistent throughout the term, making it easier to budget and plan for the future.

Fixed mortgage terms typically range from 6 months to 10 years, allowing you to choose an option that best fits your financial goals and comfort level. Most lenders also offer prepayment privileges, which generally allow you to pay an additional 10% to 25% of your original mortgage balance each year without penalty, depending on the lender and mortgage product.

If you decide to pay off your mortgage in full before the end of the term, a prepayment penalty may apply. This penalty is typically calculated as either three months' interest or an Interest Rate Differential (IRD), whichever amount is greater.

Fixed-rate mortgages are a popular choice for homeowners who value predictability and protection from interest rate fluctuations. They generally offer lower rates than open mortgages while providing the security of knowing exactly what your mortgage payments will be throughout your term.

Variable

A variable-rate mortgage offers an interest rate that fluctuates with changes to the lender's prime rate. These mortgages often start with a rate that is lower than comparable fixed-rate options, making them an attractive choice for borrowers seeking potential savings and greater flexibility.

Variable-rate mortgage terms typically range from 1 to 5 years. Depending on the lender and mortgage product, your payments may be structured in different ways. Some variable-rate mortgages have fixed payments, where the payment amount remains the same while the portion applied to principal and interest changes as rates fluctuate. Other products have adjustable payments, meaning your monthly payment may increase or decrease when the prime rate changes.

Variable-rate mortgages can be a good option for borrowers who are comfortable with some interest rate movement and are looking to take advantage of potentially lower borrowing costs. They have also historically offered lower prepayment penalties than many fixed-rate mortgages, providing added flexibility should your plans change during the term.

As with any mortgage, the right choice depends on your financial goals, risk tolerance, and long-term plans. A mortgage professional can help you determine whether a variable-rate mortgage is the best fit for your situation.

HELOC (Line of Credit) 

A Home Equity Line of Credit (HELOC) allows you to access the equity you've built in your home whenever you need it. Interest rates are typically tied to the lender's prime rate, and you only pay interest on the amount you use. With flexible access to funds and lower rates than most unsecured lines of credit, a HELOC can be a great option for renovations, debt consolidation, investments, or unexpected expenses. If you have sufficient equity, you may be able to have both a mortgage and a HELOC on your property.

Open

An open mortgage allows you the flexibility to pay off some or the entire mortgage at any time, without penalty. Interest rates are usually higher and are tied to the Bank's Prime Rate.