Understanding Your Mortgage Options: Fixed vs. Variable

Jeana Beech
Jul 8
2 min read

When it comes to buying a home, choosing the right mortgage is just as important as finding the perfect property. One of the biggest decisions buyers face is whether to go with a fixed-rate or variable-rate mortgage. Each has its pros and cons, and understanding the difference can save you thousands of pesos (or dollars) over the life of your loan.

Here’s a simple breakdown to help you decide what works best for your situation.

Fixed-Rate Mortgage: Predictability & Peace of Mind

A fixed-rate mortgage means your interest rate stays the same throughout the entire term of your loan — whether it’s 10, 15, 20, or 30 years.

Pros:

Stable Monthly Payments – No surprises. Your payment stays the same even if market rates rise.
Easy Budgeting – Great for families or first-time buyers who prefer predictable expenses.
Long-Term Planning – Ideal if you plan to stay in the home for many years.

Cons:

Higher Starting Rate – Fixed rates are usually slightly higher than initial variable rates.
Less Flexibility – If market rates drop significantly, you’re locked into your original rate unless you refinance.

Variable-Rate Mortgage: Lower Cost, Higher Risk

A variable-rate mortgage (also called an adjustable-rate mortgage or ARM) starts with a lower interest rate that adjusts over time based on market conditions.

Pros:

Lower Initial Rates – You could save money in the early years of the loan.
Benefit from Rate Drops – If interest rates fall, your payments could go down.
Good for Short-Term Buyers – Ideal if you plan to sell or refinance within a few years.

Cons:

Unpredictable Payments – Your monthly payments can increase if interest rates rise.
Harder to Budget – Can be risky if your income is fixed or tight.
Rate Caps May Still Sting – Even with limits on how high rates can go, increases can still hurt.

So… Which One Should You Choose?

The right mortgage depends on your financial goals, risk tolerance, and timeline.

Choose a fixed-rate mortgage if you want stability and plan to stay in the home long-term.
Choose a variable-rate mortgage if you're comfortable with some risk, want to save in the short term, or plan to move or refinance soon.

Final Thoughts

Mortgage terms can be confusing, but they don’t have to be. The most important step is making sure you fully understand your options before signing on the dotted line. A well-chosen mortgage can help you build equity and achieve long-term financial security.

Still unsure which mortgage is right for you? Let’s chat! I can connect you with trusted lenders and help you run the numbers so you can make the smartest move possible — financially and emotionally.