fixed or variable mortgage

That question may leave you scratching your head, especially if you're a first-time buyer. However, there are advantages to both types of mortgages.

If you're the type of person who has trouble sleeping at night because you're not sure about something, the fixed rate may be for you. Fixed rates are just what they're named as; you are locked in to a particular rate for 5 years or whatever term you agree on. It's not always the best rate in the market, because it won't change - so you can bank on what you're paying in interest with each payment.

This is particularly helpful in a volatile market where the rates change often. It's also helpful when you've bought a home that's just under what you can afford, and you can't risk the rates increasing too much and making the property too much to handle financially.

Variable rates may be more suitable for the risk-adverse and those who have played the mortgage game before. At the low end, depending on the prime rates from the Bank of Canada, your rates will be substantially lower than a fixed rate. That is a win for you, as long as the rates don't fluctuate. If they do, then you will feel the sting of your interest payments going up (and up - and up). However, if it's a time when the market is relatively calm, then you'll be at a healthy advantage!

With variable rates, you can also switch back to fixed rates at the end of your term if you feel it's a better bet, or take advantage of an early renewal with a more desirable rate.