It doesn’t cost anything to lock-in your mortgage. If you have an adjustable rate mortgage right now and you lock-into a fixed rate term of equal or greater length, there’s no cost to you.

When you lock-in your mortgage, you start a new term, with a new interest rate. What does this mean? Your current adjustable rate mortgage term, including your variable interest rate, will come to an end on the date of your lock-in and your new fixed interest rate will be determined based on the fixed rates available for the term length you choose at the time you to lock-in.

Typically, fixed rates are higher than adjustable rates, but there are instances where the opposite is true. With a fixed interest rate, you will have a consistent payment amount throughout your term and this security typically comes with a higher interest rate. A variable rate can often be lower than fixed rates, but it comes with the potential for fluctuations in your rate, and consequently your payment amount, over the length of the term. Whether or not payment fluctuations are worth the potential for lower payments is up to you as a homeowner; there is no right or wrong choice.

In short, yes, you can move back into an adjustable rate mortgage should you choose to later on, but you may have to pay a penalty to do so before maturity (this is called an early renewal). When you move from an adjustable rate mortgage to a fixed rate mortgage before your maturity date, it’s called a lock-in (or conversion). A penalty will not be charged when you lock-in, but it will be charged when you early renew.

Yes! The same privilege payment options are the available for homeowners in a fixed rate term as for those in an adjustable rate term.

When you lock-in your mortgage, your current term ends and you start a new fixed rate term. This new term will come with its own maturity date, determined by the term length you choose.

Yes, the penalty structure may change if you lock-in to a fixed rate term. Before signing an offer to lock-in your mortgage, it’s important to be fully informed. We recommend reviewing the terms and conditions of the new term, including the prepayment penalty information.

The decision to lock-in your mortgage is one that only you can make. To figure out if you should lock-in, you need to determine what level of rate fluctuation you can tolerate – both financially and emotionally. The prime rate changes in response to changes in the Bank of Canada’s key lending rate. Although you may hear speculations about upcoming rate changes in the news, we can’t know for sure when the rate will in fact change, or by how much, until it happens. Historically, the prime rate increases or decreases by 0.25 - 0.50%.