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Fixed vs variable mortgage in Nova Scotia
The choice is about three things: how much a rate rise would hurt, how likely you are to leave before the term ends, and what each costs today.
Should I choose a fixed or variable mortgage?
Choose fixed if a payment rise would strain your budget, or you want certainty for the term. Choose variable if you have room for a rise or may sell or refinance early: it is usually priced lower and costs about three months’ interest to break. On September 30, 2026 prime was 4.45%; the 5-year posted fixed, 6.09%.
What is the difference between a fixed and variable mortgage?
A fixed rate stays the same for the whole term and is usually higher than a variable rate for a similar term. A variable rate can rise and fall during the term; lenders usually price it as prime plus or minus a margin. Both are closed mortgages with the same term choices, and both qualify under the same stress test: the greater of the contract rate plus 2% and 5.25%.
| Fixed (5-year posted) | Variable (at prime) | |
|---|---|---|
| Rate | 6.09% | 4.45% |
| Monthly payment | $2,581 | $2,203 |
| If prime rises one point | No change for the term | $2,430 (adjustable payment) |
| Cost to break, typically | Greater of three months’ interest and the IRD | Three months’ interest (about $4,450) |
| Stress test | Same for both: the greater of the contract rate plus 2% and 5.25% | |
Go deeper
The detail, if you want it
Variable payments: adjustable, or fixed with a trigger rate
With an adjustable payment, the payment changes when the rate changes and a set amount of each payment still goes to principal.
With a fixed payment on a variable rate, more of each payment goes to interest when rates rise; if rates reach the trigger point written in your contract, the lender may raise the payment. Ask which kind you are being offered; the rate can be identical and the risk is not. FCAC on mortgage interest →
What it costs to break each one
On a closed variable mortgage, every one of the six large banks charges three months’ interest, but not on the same rate. RBC, TD and BMO use your rate, Scotiabank your variable or cap rate, and CIBC its prime rate.
Fixed is where the large penalties are. RBC, TD, BMO and Scotiabank publish an IRD that compares your rate with today’s posted rate for the term closest to the time you have left, minus the discount you were given when you signed. CIBC reaches the same place by adding your discount to your rate. National Bank’s published guide compares the posted rate at the start of your term with today’s rate, plus one month’s interest up to $500. Their own examples come out lower in practice, because RBC, BMO and Scotiabank discount the result to present value.
First National’s Nova Scotia fixed-rate terms compare against its lowest advertised rate for the next shorter term, with no discount added back. Not every monoline works that way: CMLS’s Rate Advantage terms use the published rate minus your original discount, like the banks. Some products add a flat-percentage minimum or allow full repayment only on an arm’s-length sale. Breaking your mortgage, in detail →
Who usually chooses which
- Fixed fits a tight first-year budget, a single income, or a plan to stay put for the whole term.
- Variable fits room in the budget, a likely sale, move or refinance inside five years, or a wish to pay down faster when rates fall.
- Hybrid. A hybrid mortgage fixes part of the balance and floats the rest, for partial protection either way.
- Converting. A convertible variable mortgage can be switched to a fixed rate during the term; FCAC notes you usually pay a fee and the new fixed rate may be higher.
A broker can show both from several lenders at once; the penalty method and prepayment privileges differ by lender as much as the rate does. I am a licensed mortgage broker in Nova Scotia, based in Bedford.
Written by Riley Oickle
Associate Mortgage Broker, Nova Scotia licence 2025-3001134, with Indi, The Independent Mortgage Company Ltd. Every figure on this page links to the government or regulator page it came from.
Why a broker
Licensed, independent, paid by the lender
- Licensed in Nova Scotia Associate broker 3001134, verifiable on the provincial register
- $0 broker fee On a standard residential mortgage the lender pays, not you
- Banks, credit unions, monolines One application, one credit check, placed with the lender that reads your file best
- Every part of the province Bedford office, remote process: Yarmouth to Sydney, the same four steps
Questions people ask
Is fixed or variable better in Nova Scotia right now?
Neither is better in general. On the Bank of Canada’s September 30, 2026 figures, prime was 4.45% and the 5-year posted fixed rate 6.09%; posted rates are list prices, and real offers sit below both. Fixed buys certainty for five years; variable is usually cheaper and costs less to leave, but the payment or the interest share moves with prime.
What happens to a variable mortgage when the Bank of Canada raises rates?
Prime moves with the policy rate, usually the same day or the next. With an adjustable payment your payment rises: on a $400,000 mortgage over 25 years, one point on prime is about $227 a month. With a fixed payment, more of it goes to interest, and at the trigger point in your contract the lender may raise it.
Which costs more to break, fixed or variable?
Usually fixed. A closed variable at the big banks costs three months’ interest to break; a fixed rate costs the greater of three months’ interest and an interest rate differential, which at a bank can be several times larger. Three months’ interest at prime on $400,000 is about $4,450.
Do I qualify for less with a variable rate?
No. The stress test applies the same way to both: you qualify at the greater of the contract rate plus 2% and 5.25%. So whichever rate is lower qualifies you for a little more, but only until the 5.25% floor takes over; below that, both qualify the same.
Can I switch from variable to fixed later?
A convertible variable mortgage can be switched to a fixed rate during the term; FCAC notes you usually pay a fee and the new fixed rate may be higher. Lock in when you want certainty, not when rates have already risen.
Still unsure? Ask me directly.
If your question isn't here, your situation is probably specific. Fifteen minutes on the phone beats reading another page, and nothing is pulled on your credit.
(902) 298-0218 · Monday to Friday, 8:00 am to 10:00 pm Atlantic
Fixed or variable, worked on your numbers
Send the mortgage amount and how long you expect to stay. You get both options side by side, with the payment and the cost to leave, within a business day.
(902) 298-0218 · Monday to Friday, 8:00 am to 10:00 pm Atlantic