This question depends on your financial situation and your goals. Fixed-rate mortgages are generally seen as risk-averse and predictable, as customers lock in a rate for the duration of their term (usually five years), meaning payments stay the same. However, if the homeowner needs to break their mortgage (pay off the loan before the end of their term), they may be subject to higher prepayment penalties. With a variable mortgage, the interest rate is subject to change throughout the term, depending on the Bank of Canada’s interest rate announcements. Therefore, the percentage of your payment that goes toward the interest and the principal will fluctuate. The penalty for breaking a variable mortgage is usually equal to three months’ interest on your loan. Related: The rate debate: whether you should go with a fixed or variable mortgage