There are two main types of mortgage interest options available to homebuyers: fixed or variable. In a fixed interest rate mortgage, the interest rate and mortgage payment stay constant throughout the lending term. Buyers can choose from a mortgage term ranging from one year to 10 years — but most people opt for three- to five-year terms. For a variable rate, the interest rate, and consequently the mortgage payment amount, can change depending on the prime rate, as set by the Bank of Canada. Within variable-rate mortgages, mortgage-holders can opt for a variable rate, which changes at any time with the overnight rate; or the fixed-payment variable rate, in which your payments stay the same, but the amount that goes towards interest will change based on overnight rate changes. Related: All you need to know about fixed-rate mortgages and the interest rate differential The down payment and mortgage payments aren’t the only costs you’ll need to budget for. Closing costs, which include legal fees, applicable condo fees, home inspection fees and others, can range anywhere from 1.5% to 4% of the sale value of the property. Property tax rates should also be factored into your budget. They’re paid twice a year and range from 0.5% to 2.5% of the sale price, depending on where you choose to live. Overall, be prepared to have a buffer of around 6-7% of the sale price of the property.