Variable rate
A variable-rate mortgage moves with the lender's prime rate, which follows the Bank of Canada's overnight rate. Your rate is quoted as 'prime minus X%'. Payments may or may not change with each rate move, depending on whether it's a VRM or ARM.
In a cutting cycle, variable rates fall in real time — no need to wait for term end to capture the drop. In a hiking cycle, they hurt fast. Historically, variable has beaten 5-year fixed roughly 70% of the time in Canada — but the losing 30% has been very painful (see 2022–2023).
At renewal you can convert variable to fixed at any time, usually into a term at least as long as what remains on the original. The conversion rate is set by the lender and is rarely the best rate available — shop before you convert.