Calculator CA5 · Renewal Shock. The Canadian Mortgage Handbook
Fixed or variable, side by side
Nobody can tell you what rates will do. What this can do is show what the two choices cost today, what the gap is worth over a full term, and how far prime would have to move before the variable one costs more.
🔒Nothing you type here leaves your phone. We don't store it and we can't see it. The math runs on your device.
This calculator goes with Renewal Shock. The Canadian Mortgage Handbook by JP O'Connor. The book explains what the numbers mean and what to do next.
How the payment is worked out. Canadian fixed-rate mortgages compound semi-annually, not monthly. The monthly rate used here is (1 + annual rate ÷ 2) to the power of one sixth, minus one — the method set out in chapter 4 of the book. Variable-rate mortgages compound monthly, and this calculator uses annual rate ÷ 12 wherever a variable rate is entered. A calculator built for an American or British mortgage uses the monthly method for everything and will give you the wrong payment for a Canadian fixed mortgage.
Any rate already filled in is as at September 2026 — Bank of Canada policy rate 2.25%, prime 4.45% at the six major banks, posted five-year 6.09%, best available five-year fixed about 4.24%. Rates move weekly and fixed rates move with the five-year Government of Canada bond yield, sometimes daily. Check yours before you rely on any of this.
🔒General information, not financial advice. This is math on the numbers you type. Nothing you enter is stored, saved or sent anywhere — there is no account and no cookie, and your numbers never leave this page. All figures are Canadian dollars (CAD). Check your own numbers with your lender or a licensed mortgage broker.
Where the two sit
As at 18 September 2026, five-year fixed was 4.19% to 4.24% insured and 4.24% uninsured. Five-year variable was 3.30% to 3.40% insured and about 3.65% uninsured. Variable has been below fixed since late 2025, the first time since 2022, which is why 42% of mortgages extended by chartered banks in February 2026 were variable while only 11% chose a traditional five-year fixed term.
Worth noticing: the country is quietly rebuilding its variable-rate exposure at the exact moment the Bank of Canada has stopped promising cuts. Its September 2026 statement gives no directional guidance at all.
What this calculator assumes
The move you enter is applied at once and held for the rest of the term, which is the harshest reasonable reading and keeps the comparison honest. It also assumes your variable payment moves with the rate — an adjustable-rate mortgage. If yours is a fixed-payment variable mortgage, the payment will not move at all. The interest will, the balance will, and calculator CA6 is about what happens when that goes too far.
Fixed payments here use semi-annual compounding, the Canadian standard for fixed-rate mortgages. Variable payments use monthly compounding, which is how variable mortgages are actually calculated.
The four things the choice decides, beyond the rate
Your penalty formula. A variable mortgage costs three months' interest to break, always, whichever way rates moved. A fixed mortgage costs the greater of three months' interest or the interest rate differential, and at a Big Five bank that differential is built out of posted rates. If there is a real chance you will sell or move inside the term, the exit on a variable mortgage is cheap and knowable. On a fixed one it is neither.
Whether your payment moves. Not the same question as fixed or variable. See CA6.
Whether you can convert. Most variable mortgages can be converted to a fixed rate mid-term, usually at the lender's then-current fixed rate for the remaining term, which is rarely its best advertised rate. Ask what rate you would be offered on conversion before you sign, not after.
What you can live with. A payment you know, or a payment that starts lower and can go either way. Everything else written about this question is commentary on those two sentences.
Check this one. Ask every lender for the actual rate you will pay on day one, as a percentage, in writing, and ask which prime it applies to mortgages. Ask what the conversion rate to fixed would be, and whether the variable payment moves with prime or stays fixed. Prime moves within a day or two of every Bank of Canada decision — the next scheduled announcement dates are published at bankofcanada.ca.
Get the full handbook
Canada · 170 pages · JP O'Connor
Renewal Shock.
The Canadian Mortgage Handbook
The rule that kept you with your lender changed in 2024. Nobody told you.
- Uninsured straight switches no longer face the stress test (since November 21, 2024)
- Why the posted rate you never paid drives your prepayment penalty
- Your trigger rate: how to find it and what happens when you reach it
- Prepayment room that's gone on the reset date if you don't use it
The other calculators
