Fixed or Variable Mortgage Rate: What’s Best For You? 2022 Easy Guide:

by | Jun 17, 2022

So you’re finally ready to take the plunge and buy your first home? Congratulations! But it can be a daunting task. As a new homebuyer, you have questions about whether to get a fixed or variable mortgage rate. For most people, their first home is among their most significant purchases. You must understand what these terms mean and can decide which one best fits your needs.

It can take time to determine the best mortgage type for you. Therefore, it is also critical to keep your bookkeeping records up to date. It will aid in calculating mortgage rates in both fixed and variable cost scenarios.

If you need clarification about these costs and which suits you, Yogi & Associates is here to guide you! Our team is ready to discuss any questions you have about your mortgage options. Moreover, we can also give you our bookkeeping services to keep your finances updated.

1. What Is A Fixed Rate Mortgage?

Fixed mortgages are outstanding for those who want stability in their monthly payments. A fixed mortgage means your interest rate doesn’t change throughout your term. You can choose an open mortgage, which won’t ding you when you break a mortgage or pay it off early.


Here’s how a fixed-rate mortgage works in practice.

On a $450,000 loan that will be paid back over 30 years, a mortgage lender offers a 2% annual percentage rate and a fixed term. Regardless of what happens with the economy, the mortgage interest rate will remain at 2%.

2. What Is A Variable Rate Mortgage?

In variable mortgage rate, The mortgage rate remains stable throughout the term of a variable rate mortgage, but the interest rate fluctuates according to market conditions. This mortgage allows you to get a lower interest rate than a fixed mortgage for short periods. These rates are lower when the Bank of Canada‘s prime rates are at their lowest. But if those rates rise, your mortgage payments will increase.

To learn more about Variable Mortgage rates, you can see the article  Variable Mortgage Rates: Guide 2022!

3. Difference between Fixed and Variable Mortgage Rate:

Following are the differences between fixed and variable mortgage rates.

Fixed Mortgage Rate Variable Mortgage Rate


The interest rate and monthly payment don’t change during the mortgage term.


The interest rate change depends on market conditions, such as prime lending rates.

Interest Rate:

Higher interest rate but with certainty where you know your monthly payment.

Interest Rate:

It has a cheaper interest rate but is at the whims of changing prime rates established by The Bank of Canada.


Your interest rate and monthly payment remain the same on your loan.


The interest rate may change over time—but you can lock in an initial interest rate until your loan is paid off.

Mortgage Break:

Fixed-rate mortgages are harder to break up with but have lower monthly payments.

Mortgage Break:

Variable-rate mortgages are easier to break up. Because they have lower penalty fees and generally have a more down monthly payment.

4. Things to Consider When Choosing a Mortgage:

Knowing whether a fixed or variable mortgage rate is best for you is essential. Of course, a fixed-rate mortgage is more attractive to people as they know their mortgage payments will be for the next few years. But variable-rate mortgages are ideal if you think interest rates will go down over time. Moreover, they offer lower rates than fixed-rate mortgages in general.

These factors will influence whether you choose a fixed or variable mortgage rate:

  • The amount of your initial deposit
  • Bank-to-bank mortgage rate comparisons
  • The principal of the loan
  • The repayment period
  • Additional funds to be added to the monthly payment — for example, title or flood insurance
  • Taxes on real estate
  • The mortgage’s duration

5. Update your Books:

In a fixed or variable mortgage rate, there are savings to be had by keeping good bookkeeping. Bookkeeping is an essential part of managing your business finances. With good bookkeeping, you determine your business’s current status. Once you have done this, you can decide if you want to go for a fixed mortgage or a variable mortgage. You can also get help from us by taking our bookkeeping services. YOGI & ASSOCIATES will provide you with accurate information on bookkeeping services from start to finish!

The Bottom Line!

It’s essential to consider both mortgages when you choose a mortgage. If you’re unsure which one is right for you, contact Yogi & Associates today! We will advise you on selecting the best mortgage for you and your family. You can also come to us if you want help keeping your bookkeeping records up To date. We can provide the best bookkeeping services at affordable prices.