Fixed Mortgage Rate: A fixed mortgage rate allows the home buyer to lock in a rate for the duration of the mortgage term, for example, over five years. The advantage of the fixed rate is that your rate will not fluctuate, and you can count on planning how much your mortgage payment will be for the term.
Variable Mortgage Rate: A variable mortgage rate means that the interest rate will change depending on the lender’s prime rate. For example, if your lender’s prime rate goes up or down, your mortgage payment will reflect that difference in interest during your mortgage term, which will affect your mortgage payment amount.