A mortgage where the interest rate stays the same for the entire term.
In Canada, fixed rate mortgages use semi-annual compounding. This means the effective annual rate is slightly higher than the stated rate. Fixed rates are determined by the bond market (specifically the Government of Canada 5-year bond yield), not directly by the Bank of Canada overnight rate. Fixed rates offer payment certainty but you may pay a higher rate than variable if rates decline during your term.
Related terms: Variable Rate Mortgage | Mortgage Term | Interest Rate