Decision guide
Fixed-Rate vs Variable-Rate Mortgage: Which Is Better?
A fixed-rate mortgage keeps the interest rate and principal-and-interest payment the same for the fixed period. A variable-rate mortgage can start lower but changes with the market. The right choice depends on how much payment certainty you need and how long you plan to stay.
Side by side
| Factor | Fixed rate | Variable rate |
|---|---|---|
| Monthly payment | Stable for the fixed term | Can rise or fall |
| Initial rate | Usually higher | Often lower as a teaser |
| Budget certainty | High | Lower |
| Benefit if rates fall | Only after refinancing | Payment can fall automatically |
| Risk if rates rise | None during the fixed term | Payment can increase |
| Best if | You want a predictable payment | You can absorb increases or plan to refinance |
Choose Fixed rate if…
- Your budget cannot absorb a higher monthly payment.
- You plan to stay in the home for a long time.
- You value certainty over the chance of a lower initial rate.
Choose Variable rate if…
- You can handle a payment increase if rates rise.
- You plan to sell or refinance before the variable period ends.
- The initial saving is large enough to justify the uncertainty.
Run your own numbers
The comparison above is qualitative. Use the free calculators for your actual figures.
Common questions
- Is a variable rate always cheaper?
- No. It can start lower, but the payment can rise later. Compare the total cost under several rate scenarios, not just the first payment.
- Can I switch from variable to fixed?
- Often yes, through a refinance or a lender conversion. There may be fees, a new qualification check or a different rate. Ask the lender for the exact terms.
- How often can a variable rate change?
- It depends on the lender and the reference index. The loan contract states the adjustment frequency and caps, if any.
More comparisons
General information only, not financial, tax or legal advice. Rules and rates change; confirm with the official source or a licensed professional. Last reviewed 2026-11-11.