Calculator
Fixed vs variable mortgage calculator
This tool doesn't forecast rates. It works out how far, and how soon, prime would have to fall for a variable mortgage to cost less than the fixed offer over your term.
Your numbers
We compare the two over this term.
The two offers
Our published 5-year fixed.
4.45% as of September 15, 2026.
Prime minus this discount. Your variable rate starts at 3.55%.
An illustration you pick, not a forecast. No one knows where prime goes next, so the break-even below shows what it would take for variable to win.
Payment type and a custom rate path(6)
A fixed payment stays the same, and rate changes shift how much goes to principal. It has a trigger rate. An adjustable payment moves with the rate.
Rate taken from the RateLens published table, current as of September 21, 2026 at 9:00 a.m. MT. Rules, premium tiers and fee schedules current as of September 16, 2026.
Over this term, variable costs less by
$12,229
Interest paid plus the balance still owing at the end of the term. We compare total cost because a lower payment that pays off less principal doesn't save you money.
- Fixed at 4.09%
- $2,654.56Starting payment, monthly
- Variable at 3.55%
- $2,516.55Starting payment, stays the same all term
- Interest over the term, fixed
- $95,222Balance $435,949 at maturity
- Interest over the term, variable
- $82,994Balance $432,001 at maturity
Your break-even
Your trigger rate
- Fixed compounding
- Semi-annual
- Variable compounding
- Monthly
- Payment type
- Fixed payment
- Rate path
- Prime holds
- Term
- 5 years
- Rules as of
- September 16, 2026
What a variable rate means for your payment. With a variable-rate mortgage your interest rate moves with your lender’s prime rate. Depending on the product, either your payment changes with the rate, or your payment stays the same and the split between principal and interest changes. With a fixed-payment variable mortgage, if rates rise far enough your payment may no longer cover all the interest you owe. That point is called your trigger rate. Past it, your balance can grow instead of shrink. This is called negative amortization, and your lender will typically require you to increase your payment or make a lump-sum payment. We’ll show you your trigger rate before you choose a variable product, and we’ll tell you what happens if you reach it.
Fixed and variable over the full term
Payments, interest and the balance each product leaves you with when the term ends.
| Measure | Fixed | Variable |
|---|---|---|
| Starting rate | 4.09% | 3.55% |
| Starting payment | $2,654.56 | $2,516.55 |
| Payment at the end of the termA fixed-payment variable stays the same | $2,654.56 | $2,516.55 |
| Interest over the term | $95,222 | $82,994 |
| Principal repaid | $64,051 | $67,999 |
| Balance at maturity | $435,949 | $432,001 |
| Cost of holding to termEverything paid, plus what's still owed | $595,222 | $582,994 |
The same mortgage under each product. Comparing payments alone misses the gap in the balance at the end of the term.
- Variable
- Fixed
| Year | Variable | Fixed |
|---|---|---|
| 0 | $500,000 | $500,000 |
| 1 | $487,347 | $488,206 |
| 2 | $474,237 | $475,924 |
| 3 | $460,654 | $463,134 |
| 4 | $446,581 | $449,817 |
| 5 | $432,001 | $435,949 |
Interest paid plus the balance still owing. Lower is better.
- Fixed at 4.09%$595,222
- Variable, prime holds$582,994
| Jurisdiction | Cost over the term |
|---|---|
| Fixed at 4.09% | $595,222 |
| Variable, prime holds | $582,994 |
The penalty to break each mortgage
Ask Daniel about fixed or variable
No one can tell you what prime does next. We can tell you which lenders price variables well, which have a fair penalty clause, and which let you convert to fixed mid-term without re-qualifying.
Variable ahead by
$12,229
How this is calculated
Every figure on this page comes from one tested calculation engine. Here’s what it does.
Why we compare total cost instead of payments
A variable payment that’s $80 a month lower doesn’t save you anything if it also pays off $80 a month less principal. So this tool compares interest paid over the term plus the balance still owing at maturity. That’s the total cost of holding each product to the end of the term, and it treats both the same way.
Fixed compounds semi-annually, variable monthly
Fixed-rate mortgages compound semi-annually, not in advance, as section 6 of the federal Interest Act requires for the disclosed rate. Variable-rate mortgages compound monthly. At the same nominal rate, the monthly-compounded product costs slightly more in effective interest. The tool applies each convention to its own product.
How the break-even is calculated
The engine runs the variable mortgage month by month under the rate path you choose. It then searches for the one-step drop in prime that would bring its total cost level with the fixed offer. A second search finds the latest month that drop could happen and still come out ahead. Both searches run over full payment schedules, with no rule of thumb. If no drop above the rate floor is enough, the tool tells you so instead of showing a number.
Fixed payments and the trigger rate
Most Canadian variable mortgages have a fixed payment. The amount stays the same, and the split between interest and principal shifts with every rate change. The rate at which the payment stops covering the interest is your trigger rate. Past it, the shortfall is added to the balance. The tool shows your trigger rate and how far you are from it. If the path you choose crosses it, the tool shows the balance growing instead of capping it.
With an adjustable payment, the payment is recalculated at every rate change over the remaining amortization. There’s no trigger rate, because the payment always covers the interest. The risk moves from your balance to your monthly budget.
This tool doesn’t forecast rates
Every rate path on this page is an illustration you picked, and we don’t represent that any of them will happen. Prime is 4.45% as at September 15, 2026; the Bank of Canada’s next scheduled announcement is October 28, 2026. Today’s published rates are a starting point. They don’t predict tomorrow’s.
Common questions
Should I choose a fixed or a variable mortgage in 2026?
It depends on where rates go, and no one can predict that. What you can work out is the break-even: how far prime would have to fall, and how soon, for variable to cost less over your term.
If that drop looks plausible to you and you could handle rates going the other way, variable is a reasonable bet. If not, fixed gives you a known cost for the whole term.
What is a trigger rate?
On a fixed-payment variable mortgage, it’s the rate at which your entire payment goes to interest and none goes to principal.
Above it, the unpaid interest is added to your balance, so the balance grows. Lenders usually contact you at that point and ask for a higher payment or a lump sum. An adjustable-payment variable has no trigger rate, because the payment moves with the rate.
Is the penalty different on a variable mortgage?
Yes, and it’s usually much smaller.
On a variable mortgage, the penalty is normally 3 months’ interest. On a fixed mortgage, it’s the greater of 3 months’ interest or an interest rate differential (IRD). Lenders that calculate the IRD using posted rates charge much more than lenders using discounted rates. If you might sell, refinance or move during the term, factor that in. Estimate both.
Can I switch from variable to fixed later?
Usually, yes. Most variable mortgages have a conversion privilege that lets you move to fixed mid-term without a penalty.
The details vary. Some lenders only convert at their posted rates, and not their best discounted rates. Some require the new fixed term to be at least as long as the time left on your variable. Confirm the clause before you sign, so you know your options before rates move.
Why does my variable payment look higher than the fixed one?
Variable mortgages compound monthly and fixed mortgages compound semi-annually. Each starting payment is calculated at its own rate over the same amortization.
When prime minus your discount is close to the fixed rate, monthly compounding alone can push the variable payment above the fixed one. The higher payment reflects a higher cost, and it’s why this page compares total cost instead of payments.
What to work out next
- Mortgage penalty (IRD)What it costs to break each one. The difference can be large.
- Payment shockWhat happens at renewal, whichever you pick today.
- Mortgage paymentThe payment on its own, at every frequency.
- Stress testBoth products are stress-tested, each at its own compounding.
- Renewal comparisonIf you're renewing, compare against the renewal offer you have.
- AffordabilityWhat either rate supports in purchase price.
This calculator provides estimates only. Results are based on the information you enter and on assumptions that may not reflect your actual qualification, rate or costs. These include semi-annual, not-in-advance compounding for fixed rates, as required under section 6 of the federal Interest Act, and the mortgage default insurance premium tiers published by CMHC, Sagen and Canada Guaranty. It is not mortgage advice, a quote, a rate hold, a pre-approval or an offer of credit, and RateLens does not guarantee its accuracy or completeness. Your actual rate, payment, default insurance premium and closing costs will depend on your credit profile, income, the property, the lender’s current rates and policies, and other factors confirmed during a full application.
If you have a variable-rate mortgage with a fixed payment, rising rates mean more of each payment goes to interest and less to principal. Your trigger rate is the rate at which the entire payment goes to interest. Past that point your balance can increase. This calculator does not model trigger-rate effects. Speak to Daniel De Sousa, Mortgage Associate, about your specific mortgage.
Rules snapshot: September 16, 2026. Rates shown are calculation assumptions, not confirmed offers. Speak with Daniel De Sousa, Mortgage Associate, for a personalized quote. Indi The Independent Mortgage Company Ltd. o/a Indi Mortgage, a licensed mortgage brokerage licensed by RECA.
Daniel De Sousa, Mortgage Associate, is licensed by the Real Estate Council of Alberta and registered with Indi The Independent Mortgage Company Ltd. o/a Indi Mortgage.
Indi The Independent Mortgage Company Ltd. o/a Indi Mortgage is a mortgage brokerage licensed by the Real Estate Council of Alberta (RECA). Verify our licence on RECA ProCheck(opens in a new tab)
RateLens is a trade name used by Daniel De Sousa, Mortgage Associate, licensed in Alberta by the Real Estate Council of Alberta and registered with Indi The Independent Mortgage Company Ltd. o/a Indi Mortgage.
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Compare the whole mortgage contract
We compare pricing, prepayment privileges, conversion terms and how each lender calculates a payout.
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