How to Compare Mortgage Offers
When comparing mortgages, it's tempting to focus only on the monthly payment — but a lower payment doesn't always mean a lower total cost. A longer amortization period reduces your payment but increases total interest paid over the life of the loan. This calculator shows you all the numbers so you can make an informed decision.
Key Factors When Comparing Mortgages
- Interest rate: Even 0.25% difference on a $500,000 mortgage saves thousands over 25 years.
- Amortization period: A 30-year vs 25-year amortization lowers monthly payments but adds years of interest.
- Total interest paid: The truest measure of a mortgage's cost over its full life.
- 5-year cost: Useful if you plan to refinance or sell within the next term.
- Monthly payment: Must fit your monthly cash flow — no comparison tool can override your budget.
Fixed vs Variable Rate Mortgages in Canada
Fixed rate mortgages lock your rate for the term (typically 5 years), giving you payment certainty. Variable rate mortgages fluctuate with the prime rate and have historically averaged lower costs over time, but carry rate risk. When comparing a fixed vs variable offer, consider what scenario looks better if rates rise 1–2% from today.