A fixed-rate mortgage offers stability by locking in the interest rate for the entire duration of the loan. This means the monthly repayment amount remains the same throughout the term, regardless of changes in the broader interest rate environment. Many borrowers choose this option when they prefer predictable repayments and want to avoid fluctuations in budgeting. It’s particularly useful in times when interest rates are low and expected to rise in the future.

A variable-rate mortgage, on the other hand, comes with an interest rate that can fluctuate based on market movements or changes set by the lender. While initial rates may be lower than fixed-rate options, the monthly repayments can rise or fall depending on interest rate trends. This type of mortgage can be suitable for those who are comfortable with potential changes in their repayment amounts and who might benefit if interest rates decline.