Quick reference
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Fixed-rate mortgage
Your interest rate is locked for the entire term. Payments don’t change. The trade-off: fixed rates are typically slightly higher than variable at any given moment, because you’re paying a small premium for the certainty. Best for borrowers who want predictability and can’t absorb payment increases comfortably.
Variable-rate mortgage
Your interest rate moves with prime. When the Bank of Canada raises or lowers the overnight rate, your mortgage rate adjusts accordingly. Historically, variable-rate borrowers have come out ahead about 70% of the time over typical 5-year terms — but the years where they don’t can be expensive. Best for borrowers with budget flexibility and a tolerance for some uncertainty.
Open vs closed
A closed mortgage has prepayment limits and penalties for paying it off early; in exchange, you get a lower rate. An open mortgage can be paid off any time without penalty, but the rate is typically meaningfully higher. Most Canadians choose closed mortgages for the rate savings; open mortgages make sense when you know you’ll be paying off the mortgage soon (within a year or two) and the early-payout penalty would exceed the rate premium.
HELOC (Home Equity Line of Credit)
Not technically a mortgage at all — it’s a revolving credit line secured by your home. Borrow what you need, pay it back, borrow again. Rates are variable and tied to prime, usually with a small premium. HELOCs work well for borrowers who need flexibility, are paying down debt actively, or are waiting on a lump sum that will clear the balance.
Which one’s right for you?
The honest answer is: it depends on your specific situation, budget, and plans. Try our Rate Wizard for a quick directional answer, or talk to a specialist for a tailored recommendation.