Choosing a mortgage is about more than finding the lowest starting rate. The mortgage structure can affect whether your payment changes, how quickly you repay the principal, and how much you may still owe at renewal.
Marathon Mortgage offers competitive fixed and adjustable rate options for eligible transactions. Based on the fact that mortgage rates constantly change, borrowers should review Marathon Mortgage’s current rates and consider the full product terms before making a decision.
The fixed payment would generally remain approximately $2,145 during the term. The adjustable payment could move in either direction as Marathon’s Prime Rate changes.
These figures are illustrations, not predictions. They show that an adjustable mortgage may produce a lower or higher payment than a fixed mortgage depending on the size, timing, and duration of future rate changes.
The fixed mortgage calculations use semiannual interest compounding. The adjustable mortgage calculations use monthly interest compounding. Actual payments may differ because of payment frequency, rate-adjustment timing, fees, insurance, contract provisions and rounding.
What Makes Mortgage Rates Move?
Fixed and adjustable mortgage rates are influenced by different parts of the financial market.Fixed rate mortgages
Fixed mortgage rates are generally influenced by Government of Canada bond yields and the lender’s funding costs. This means new fixed mortgage rates may rise or fall even when the Bank of Canada does not change its policy rate. However, once a fixed mortgage begins, the contracted rate and scheduled principal-and-interest payment generally remain unchanged for the selected term. The cost of borrowing is therefore typically known for the full term.Variable and adjustable rate mortgages
Variable and adjustable mortgage rates are normally based on the lender’s Prime Rate, plus or minus the adjustment stated in the mortgage agreement. A lender’s Prime Rate is influenced by Bank of Canada decisions, but each lender sets its own Prime Rate. It may move after a Bank of Canada announcement, but it is not guaranteed to change at the same time or by the same amount. The Bank of Canada does not directly set Marathon Mortgage’s Prime Rate or individual mortgage pricing.How Do the Payments Work?
The terms “variable” and “adjustable” are sometimes used interchangeably, but they can describe different payment structures.| Mortgage structure | What happens to the rate? | What happens to the payment? | Main consideration |
|---|---|---|---|
| Fixed rate | Remains fixed for the term | Generally remains unchanged | Provides payment and borrowing-cost certainty |
| Variable rate with a fixed payment | Changes with lender Prime | May remain unchanged | Less principal may be repaid when rates rise |
| Adjustable rate | Changes with lender Prime | Normally rises or falls with the rate | Payment changes, but scheduled amortization generally continues |
Fixed-payment variable mortgages
With a fixed-payment variable mortgage, the interest rate changes while the scheduled payment may remain the same. When rates rise, more of each payment goes toward interest and less goes toward principal. If rates rise far enough, the payment may no longer cover all the interest being charged. Some borrowers with this structure have reached renewal with a larger remaining balance than expected. This can result in a higher balance to renew and a larger payment when the mortgage is recalculated. Depending on the agreement, the mortgage may also reach its trigger rate or enter negative amortization. In those circumstances, unpaid interest may be added to the mortgage balance, and a payment increase, lump sum payment or both, may be requested by the lender.Adjustable rate mortgages
With an adjustable rate mortgage, both the interest rate and the scheduled payment generally change when the lender’s Prime Rate changes. When Prime rises, the payment typically increases. When Prime falls, the payment may decrease. Because the payment adjusts to reflect the changing interest cost, principal repayment generally continues according to the scheduled amortization. This usually provides more predictability about the balance remaining at maturity than a fixed-payment variable mortgage. It does not guarantee the payment available at renewal. Renewal payments will still depend on the remaining balance, the rates then available, the selected term and other mortgage conditions.Illustrative Payment Comparison
The following example uses a $400,000 mortgage, a 25-year amortization and monthly payments. The starting rates reflect rates published by Marathon Mortgage as of July 28, 2026. They are subject to change and may not be available for every applicant or transaction.| Scenario | Illustrative Rate | Starting Payment | New Monthly Payment | Change vs. Starting Payment |
|---|---|---|---|---|
| 5-year Fixed Rate Mortgage — Starting Rate | 4.19% | $2,145 | $2,145 | Original Payment |
| 5-year Fixed Rate Mortgage — Rate Is Fixed for the Entire Term | 4.19% | — | $2,145 — No Change | $0 — No Change for the Entire Term |
| 5-year Adjustable Rate Mortgage — Starting Rate | 3.60% | $2,024 | $2,024 | Original Payment |
| 5-year Adjustable Rate Mortgage — Rate Decreases | 3.35% | — | $1,970 | $54 Decrease in New Payment |
| 5-year Adjustable Rate Mortgage — Rate Decreases | 3.10% | — | $1,918 | $106 Decrease in New Payment |
| 5-year Adjustable Rate Mortgage — Rate Increases | 3.85% | — | $2,078 | $54 Increase in New Payment |
| 5-year Adjustable Rate Mortgage — Rate Increases | 4.60% | — | $2,246 | $222 Increase in New Payment |
| 5-year Adjustable Rate Mortgage — Rate Increases | 5.10% | — | $2,362 | $338 Increase in New Payment |
What If Rates or Your Circumstances Change?
Changing circumstances do not automatically mean the mortgage must be refinanced. Depending on the lender, mortgage agreement and borrower’s situation, possible options may include:- Continuing with the existing mortgage until maturity.
- Converting an adjustable or variable mortgage to a fixed rate.
- Completing an early renewal.
- Extending or amending the mortgage.
- Blending the existing rate with a new rate.
- Refinancing or switching lenders.
Which Mortgage May Be Suitable?
A fixed rate mortgage may be suitable when:
- Consistent payments are important.
- The household budget has limited room for payment increases.
- The borrower values certainty during the term.
- The borrower expects to keep the mortgage until maturity.
An adjustable rate mortgage may be suitable when:
- The borrower can manage possible payment increases.
- The borrower wants the payment to respond when lender Prime changes.
- Maintaining the scheduled amortization is important.
- Greater predictability about the balance at maturity is a priority.
What Should Current Marathon Clients Do at Renewal?
Current Marathon Mortgage clients should contact Marathon directly before their maturity date. Starting early provides time to review the remaining balance, current payment, available terms, and any changes in the client’s financial situation. Marathon Mortgage approaches the renewal review as a value-added service. The objective is to help clients understand the options available under their mortgage agreement and current Marathon policies before they make a decision. Renewal pricing may differ from the rates published for purchases, switches, or refinances. Existing clients should contact Marathon Mortgage directly for current renewal information.Disclaimer: The information provided in this article is for general educational purposes only and should not be considered financial, legal, tax, or accounting advice. Any examples, calculations, payment estimates, or scenarios are illustrative only and are not guarantees or forecasts of future interest rates, mortgage payments, or market conditions. Mortgage rates, products, terms, policies, features, and eligibility requirements are subject to change without notice and may vary based on the applicant, property, province, and transaction. All mortgage applications are subject to underwriting review, approval, and applicable conditions. Every borrower’s situation is unique. Existing Marathon Mortgage clients should contact Marathon Mortgage directly regarding their mortgage, renewal options, or product features. Information is current as of the publication date and may change over time.
Frequently Asked Questions
Does an adjustable mortgage always cost less than a fixed mortgage?
No. The result depends on the starting rate and how lender Prime changes during the term. An adjustable mortgage may produce lower or higher payments and borrowing costs.
Does a Bank of Canada rate decision change an existing fixed mortgage?
A Bank of Canada decision may influence new fixed mortgage pricing through financial markets. However, it would typically not affect a fixed-rate mortgage that has already been funded and is in progress.
Why can a fixed-payment variable mortgage have a higher balance at renewal?
When rates rise, more of the unchanged payment may go toward interest and less toward principal. In some circumstances, unpaid interest may also be added to the mortgage balance.
Where can borrowers find Marathon Mortgage’s current rates?
Borrowers can review Marathon Mortgage’s current rates and speak with a mortgage broker who works with Marathon Mortgage for more details. Existing Marathon clients should contact Marathon directly.
