Published 16 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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Choose fixed if you want certain payments and may not move or refinance during the term; choose variable if you can handle payment or amortization changes and value lower penalties if you break the mortgage, which are usually three months’ interest versus the greater of three months or an interest rate differential on fixed. The Bank of Canada policy rate was 2.25% in September 2026. Both types must pass the stress test.
How they work
| Fixed | Variable | |
|---|---|---|
| Rate | Locked for the term | Moves with lender prime |
| Payments | Stay the same | Either change (adjustable) or stay fixed while amortization changes |
| Penalty to break | Usually greater of 3 months’ interest or IRD | Usually 3 months’ interest |
| Best for | Budget certainty, staying put | Flexibility, possible rate cuts, possible move |
Where rates are in 2026
The Bank of Canada held its policy rate at 2.25% on 2 September 2026, and lender prime rates move with it. Advertised mortgage rates change weekly, so compare quotes from a bank and a mortgage broker on the same day rather than relying on an article.
The stress test still applies
With federally regulated lenders, you must qualify at the greater of your contract rate plus 2% or 5.25%, whichever type you choose.
What can you afford?
Test your budget at a fixed or variable rate.
Free tool — what can you actually afford here?
A simple way to decide
- Could you move, upsize or refinance within five years? Lean variable or a shorter fixed term.
- Would a payment increase strain your budget? Lean fixed.
- Do you have savings to absorb rate changes? Variable becomes more comfortable.
- Ask each lender about porting and penalty calculations before signing.
Where I fit
I am Jatin Dua, Broker of Record at RE/MAX Quantum Realty. I am not a mortgage broker, but I help buyers across Toronto and the GTA build a budget that works under either choice and connect them with mortgage professionals.
The takeaway
Fixed gives certainty; variable gives flexibility and usually lower penalties. With the Bank of Canada rate at 2.25% in September 2026, choose based on how likely you are to move or refinance and how well you can handle payment changes, and compare penalties as closely as rates.
Talk it through with me
Buying or renewing soon?
Tell me your plans and timeline. I will send a budget range and introduce a mortgage professional if you want one.
I will come back to you personally, usually the same day. If it is urgent, call or text 833-330-1925.
Frequently asked questions
Should I get a fixed or variable mortgage in 2026?
Fixed suits people who want payment certainty and expect to stay put; variable suits those who can handle changes and may move or refinance.
What is the Bank of Canada rate in 2026?
The policy rate was 2.25% after the 2 September 2026 decision. Check the Bank of Canada for the latest.
What is the penalty to break a variable mortgage?
Usually three months’ interest, but check your contract.
What is the penalty to break a fixed mortgage?
Usually the greater of three months’ interest or the interest rate differential, which can be much larger.
Does the stress test apply to variable mortgages?
Yes, at the greater of your contract rate plus 2% or 5.25% with federally regulated lenders.
Can I switch from variable to fixed?
Many lenders allow conversion to a fixed term, sometimes without penalty. Ask your lender.
Sources
- Bank of Canada — policy interest rate — the overnight rate that drives prime and variable mortgage rates. Accessed 16 September 2026.
- Financial Consumer Agency of Canada — breaking your mortgage contract — prepayment penalties, porting and blend-and-extend options. Accessed 16 September 2026.
- Office of the Superintendent of Financial Institutions (OSFI) — minimum qualifying rate rules for federally regulated lenders. Accessed 16 September 2026.
Related reading
- Mortgage stress test 2026
- Mortgage renewal 2026
- Prepayment penalties and IRD
- Self-employed mortgages
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Etobicoke. I work with buyers and sellers across Toronto and the GTA, with deep local knowledge of the west end. Four-plus years of active GTA transactions and over $100 million in sales volume. Every market figure here comes from TRREB’s published tables and every rule from RECO or Ontario legislation, so you can check all of it without asking me.
Reach me at connect@jatindua.com or 833-330-1925, or book a call.