What this calculator answers
Most variable-rate mortgages let you convert to a fixed rate with the same lender at any time, usually without a penalty, as long as you choose a term at least as long as the time left on your current one. The question is whether the fixed rate you are offered today will cost less than riding out whatever prime does next.
That depends entirely on future rates, which nobody can predict. So instead of a forecast, this calculator runs several rate paths, including one you set, and works out how far rates would have to rise before locking in comes out ahead.
How the calculation works
- The fixed option uses the lock-in rate, compounded semi-annually, for the months left in your term.
- Each variable scenario changes your rate in 0.25% steps spread over the months shown. With an adjustable-rate mortgage the payment is recalculated at each change; with a fixed-payment variable the payment stays put and the split between interest and principal moves.
- Total cost = everything you pay until maturity + the balance still owed then. Including the balance stops a lower payment from looking like a saving when it only paid down less.
- The break-even move is found by trying different total changes in your own scenario until both options cost the same.
Assumptions and limits
- Rate scenarios are illustrations, not predictions. Real changes follow Bank of Canada decisions and lender prime rates.
- Conversion rules are lender policy: which terms you can choose, the rate offered (often not the best rate on the market) and any fee. Ask your lender.
- After maturity both options renew at rates nobody knows; the comparison stops at your current maturity date.
- Locking in usually changes your penalty from three months’ interest to the higher of three months’ interest or an IRD. That matters if you might sell or refinance early.
Common questions
Does it cost anything to lock in?
Converting with your current lender is usually free. You typically must pick a fixed term at least as long as what is left of your variable term. Switching to another lender before maturity is a break and usually costs three months’ interest.
Is the lock-in rate my lender offers a good rate?
Not always. Lenders often offer their standard rate rather than their best discounted rate. It is worth asking for a better one, and comparing it with what other lenders would offer at your renewal.
What if I have a fixed-payment variable mortgage?
Your payment stays the same, so rising rates show up as slower paydown or, past your trigger rate, a growing balance. Check the warnings above and the trigger rate calculator.
Why does the answer change so much with my scenario?
Because the difference between the two options is driven almost entirely by what rates do next. That is why the calculator shows the break-even move: if you think rates will rise more than that, locking in is the safer bet; if not, variable has the edge.
Sources
- Interest Act, section 6 (rules checked 2026-10-31)
- FCAC: prepayment penalties (rules checked 2026-10-31)
- Bank of Canada, October 28, 2026 decision (rules checked 2026-10-31)