Updated September 22, 2026

One of the most common questions I hear right now is:

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

With inflation concerns, trade uncertainty, tariffs and global economic pressures still affecting the market, it’s understandable that borrowers are watching interest rates closely.

However, no one can predict rate movements with certainty. Instead of trying to time the market perfectly, it may be more helpful to ask:

Which mortgage option fits your budget, plans and comfort level if rates don’t move the way you expect?

Variable Rates

Variable mortgage rates generally move with a lender’s prime rate, which is influenced by the Bank of Canada’s overnight rate.

As a result, borrowers may benefit if rates decline. On the other hand, borrowing costs can increase if rates rise.

A variable mortgage may be worth considering if you:

• Have flexibility in your monthly budget
• Are comfortable with rate fluctuations
• Want the opportunity to benefit if rates decline
• Value flexibility and potentially lower prepayment penalties

Most importantly, it’s important to understand how your lender’s variable product works, since payment structures can differ.

Fixed Rates

A fixed-rate mortgage keeps your interest rate the same for the term, which provides predictable payments and makes budgeting easier.

For that reason, fixed may appeal to borrowers who:

• Prefer payment certainty
• Have limited room for payment increases
• Want protection from rising rates during their term
• Value stability over trying to time the market

It’s also worth remembering that fixed mortgage rates are not set directly by the Bank of Canada.

Instead, they are influenced by bond markets, lender funding costs and broader market conditions. Because of that, fixed rates can move even when the Bank of Canada leaves its policy rate unchanged.

What Should Borrowers Expect?

As of September 2026, the Bank of Canada’s policy rate remains at 2.25%.

Going forward, the Bank will continue to watch inflation, economic growth, tariffs, energy prices and global uncertainty when making future rate decisions.

That means rates could move in either direction depending on how economic conditions develop.

Rather than relying on a prediction, borrowers may be better served by choosing a mortgage that still works under more than one possible rate scenario.

So, Which Is Better?

There is no one-size-fits-all answer.

Ultimately, the right choice depends on your financial situation, future plans and comfort level with risk.

When comparing fixed and variable options, it’s worth looking at:

• Your monthly budget
• Your tolerance for changing payments
• How long you expect to keep the mortgage
• Prepayment penalties
• Portability and flexibility
• Your future plans
• The actual mortgage products available to you

In many cases, the lowest rate is not necessarily the best overall mortgage.

Let’s Look at Your Options

If you’re buying, renewing or refinancing, I can help you compare fixed and variable options and look at how different rate scenarios could affect your payment and overall mortgage strategy.

That way, you can make a decision based on your own financial picture rather than headlines or predictions.

Rebecca Lanigan
Mortgage Associate — Licence #514930
Dominion Lending Centres The Mortgage Firm
Brokerage Licence #316454

Phone: 306-361-8616
Email: rebeccalanigan@laniganmortgages.com
Website: rebeccalanigan.ca

Have questions about your mortgage? Let’s connect and review your options.

For general informational purposes only. This information is not intended as financial, legal or investment advice and does not constitute a commitment to lend or a guarantee of mortgage approval, product availability or future interest rates. Mortgage rates, products, lender policies and qualification requirements are subject to change and individual borrower circumstances.