The down side is that you will not be able to take advantage of a lower interest rate and save on over all interest costs. The second disadvantage is that if you should need to open your fixed term contract early, your penalty could be nine times greater than if you had selected a variable rate term.
The #1 advantage of selecting a variable rate term is the ability to save on overall interest cost over the life of your mortgage (for more information, check out our separate article “The Variable Rate Advantage”.)
“...choosing the right type of mortgage can be the most important decision when identifying your homeownership goals.”
Dave Fullerton, Mortgage Professional
Another attractive advantage for choosing a variable rate term is that in the event you need to open your contract prior to the renewal date, the penalty is limited to three months of interest.