Fixed vs. Variable Rate Mortgages in 2025 — What’s the Smart Move?

Rachel Cousins
Jun 5
2 min read

Fixed vs. Variable Rate Mortgages Rita and Rachel Cousins Mortgage Brokers Nanaimo

Are you torn between a fixed or variable rate mortgage? You’re not alone.

It’s one of the most common (and important) questions I get asked:

“Should I choose a fixed or variable rate for my mortgage?”

There’s no one-size-fits-all answer, especially in 2025. With interest rates shifting again and the Bank of Canada making multiple announcements this year, now is the perfect time to get clear on what each option means for your finances.

Quick Breakdown:

Fixed-Rate Mortgages

Your rate and monthly payment stay the same through your term.
Great for budgeting and long-term peace of mind.
No surprises—but you could miss out on savings if rates drop.

Variable-Rate Mortgages

There are two types:

Fixed Payment Variable – Your payment stays the same, but how much goes to interest vs. principal changes as rates move.
Adjustable Payment Variable – Your total payment changes based on current rates.
- You benefit when rates drop.
- You carry risk if rates go up (and may need to adjust your budget).

So, Which One Should You Choose?

Ask yourself:

Do I value predictability or potential savings?
What’s my risk tolerance?
How long will I stay in this home?
Can I afford a surprise increase in monthly payments?

As of April 2025, the Bank of Canada’s rate is sitting at 2.75%. With five more announcements to go this year, we could see movement either way. Some economists expect rates to drop again—others are hedging for a holding pattern.