A fixed rate mortgage is a type of loan where the interest rate remains constant thorough out the term of mortgage. You can get Fixed Rate Mortgages for different duration of terms but most of the people go for five year term. Fixed Rate Mortgages provide stability and budgeting capabilities that are not offered by Variable Rate Mortgages.
If prime rate increases, Fixed Rate Mortgages are not altered for your term length as is the case with Variable Rate Mortgages in which you have to switch to Fixed Rate Mortgage.
There is another mortgage that is trending these days and that is Hybrid Mortgages in which part of the mortgage is locked at fixed-rate for a certain time while the other part is exposed to present variable rate.
Can’t decide what is best for you? Our mortgage broker can help you get out o this dilemma.