Although fixed rate mortgages offer predictability, there are some downsides to consider. Your initial interest rate may be higher compared to a variable rate mortgage
and you will be locked into that specific rate for the whole mortgage term. There is also uncertainty regarding penalty fees
if you decide to break your mortgage
. The penalty for fixed rates will be calculated based on the greater of a 3 month interest penalty or an interest rate differential (IRD). Unfortunately, there is no set formula for how that penalty is calculated and depending on your lender can vary materially.