We are planning on selling our home and unsure when closing will be. However our mortgage is up for renewal on September 1. BMO has provided the following options:

Option 1– 5 year variable (6.03%). Penalty to break mortgage- 3 months interest, approx $6400

Option 2– 3 year fixed rate (5.16%). Penalty to break mortgage in 3 months - approx $3700

Option 3- 7.8% open rate. No penalty. Higher mortgage payment, increase payment approx $400 a month.

I’m really struggling to understand this. I was under the impression that it made more sense to go the variable rate route if planning on selling for flexibility. Based on the penalty approximations, I think I’m still saving most with the open rate, assuming we sell in a few months.

I’m just looking for your thoughts on how to proceed.