The safe and sound choice in today’s mortgage market is to lock down a rate for five years and let borrowing costs do what they may.

That’s how you should proceed if you’re a nervous first-time home buyer or just holding things together financially as you renew. Everyone else, consider the variable-rate option. While they leave you exposed to rising interest rates ahead, variable-rate mortgages can be cheaper in two important ways.

Currently, widely available discounted variable-rate mortgages can be had for 2.4 per cent while fixed-rate mortgages bottom out around 3.19 per cent. That’s a maximum spread of 0.79 percentage points, enough to offset three increases in the Bank of Canada’s trendsetting overnight rate. The central bank could conceivably raise rates by more than 0.25 of a point in any one rate setting, but that’s unusual.

Variable-rate mortgages can also be cheaper than fixed-rate mortgages in the cost to break your loan before the term is up. People who demand the flexibility to exit a mortgage early at no cost can choose an open mortgage, but the cost is an extra-high mortgage rate.

Breaking a mortgage is fairly common. RateSpy.com says discussions with lenders suggest that only a little over half of borrowers with a five-year mortgage reach the end of their term, and that 15 per cent to 20 per cent of borrowers pay a penalty when breaking their mortgage.

Depending on when you bought a house within the past five years and your loan particulars, the penalty to break a fixed-rate mortgage with $400,000 remaining on it could cost roughly $2,500 to $5,000.

“A lot of people say they’re not going to make any changes during their mortgage term,” said Kola Ifabumuyi, a…