What is a Fixed Rate Mortgage?

A fixed rate mortgage will have a constant rate for your mortgage payments throughout the term of the dictated by the contract length. The length of this contract is determined by your contract term. These are commonly 3 years, 5 years or 10 years.

This should not be confuses with your  amortization period, which is the length of time it will take to pay off your mortgage. Rather this term is the length of time your rate will be locked in.  After the end of your rate term you will be required to renegotiate your interest rate with your lender.

3 and 5 year fixed rate mortgages are the most common in Canada. With many lenders offering premium rates for these mortgage types

• 66% of Canadians choose fixed rate mortgages
• Fixed rate mortgages follow 3, 5 and 10 year government bond yields
• 20% of Canadians choose 2-4 year fixed term mortgages.