The Great Rate Debate: Fixed vs Variable in 2026
Choosing between fixed and variable rates is one of the biggest mortgage decisions you'll make. With rates normalizing after the 2025 cutting cycle, here's your comprehensive guide.
Current Rate Landscape
How Each Works
Fixed Rate Mortgages
Your rate stays constant for the entire term.
Advantages:
- Predictable payments
- Protection from rate increases
- Peace of mind
Variable Rate Mortgages
Your rate fluctuates with prime rate.
Advantages:
- Historically lower long-term cost
- Benefits from rate cuts
- Often lower penalties
The 2026 Decision Framework
Choose Fixed If:
- You're at your maximum affordability
- Rate uncertainty causes stress
- You have tight monthly cash flow
- You plan to break the mortgage early
Choose Variable If:
- You can absorb rate fluctuations
- You have financial flexibility
- You believe rates will decline further
- Your mortgage is smaller
Frequently Asked Questions
Is variable still better over time?
Historically yes, but past performance doesn't guarantee future results.
Can I switch from variable to fixed?
Most variable rate mortgages allow conversion to fixed anytime without penalty.
What if rates go back up?
The stress test ensures you could handle rates 2% higher than your contract rate.
Contact us for personalized advice on your situation.
