RatesJune 20, 2026 · 5 min read
Fixed vs Variable Mortgage in 2026 — Which Should You Choose?
Variable at ~3.35% vs 5-year fixed at ~4.89%. The spread is significant. Here's who should choose what.
Current Rate Comparison (June 2026)
The gap between variable and 5-year fixed is approximately 1.5% — one of the largest spreads in recent years.
| Type | Rate | Monthly (500K) | Break Penalty |
|---|
| Variable | ~3.35% | ~$2,460 | 3 months interest |
| 5-Year Fixed | ~4.89% | ~$2,870 | IRD (can be large) |
Choose Variable If...
- You have a financial buffer to absorb potential rate increases
- You believe rates will stay flat or drop in the next 2–3 years
- You may need to break your mortgage early (much lower penalty)
- You want to take advantage of the current rate savings
Choose Fixed If...
- You're at the top of your budget and can't afford payment increases
- You need certainty for budgeting purposes
- You're risk-averse and value peace of mind over savings
- You plan to stay in the home for the full term
The Break-Even Point
At current rates, variable saves approximately $410/month vs 5-year fixed. If rates rise by 1.5%, you'd break even. If they rise more, fixed wins. If they stay flat or drop, variable wins significantly.
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Go to Mortgage Tools →⚠️ This article is for informational purposes only. Not financial advice. Canada Mortgage Rates is not a licensed mortgage broker. Always verify with a licensed professional.
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