Canada Mortgage Rate Report
Updated: | Bank of Canada
Daily Canadian fixed and variable mortgage rates for home buyers and refinancing.
Current Rates
| Rate Type | Rate | Description |
|---|---|---|
| Prime Rate | 4.45% | Bank of Canada prime lending rate |
| Variable (Closed) | 3.76% | Convertible variable mortgage |
| 1-Year Fixed | 5.32% | Short-term fixed (insured) |
| 3-Year Fixed | 3.87% | Medium-term fixed (insured) |
| 5-Year Fixed | 3.94% | Most popular term (insured) |
These posted mortgage rates are published by the Bank of Canada and represent rates offered by major Canadian financial institutions including TD, RBC, BMO, Scotiabank, and CIBC. Posted rates serve as a benchmark—most borrowers qualify for lower discounted rates based on their credit score, down payment size, and relationship with their lender. For a $500,000 mortgage, even a 0.25% rate difference saves approximately $7,500 over a 5-year term. Always negotiate with multiple lenders and consider mortgage brokers who can access rates from dozens of institutions.
12-Month Rate Trends
Understanding Canadian mortgage rate trends is crucial for timing your home purchase or refinance decision. When rates rise, your monthly payments increase and your maximum mortgage affordability decreases—a 1% rate increase on a $500,000 mortgage adds roughly $250 to your monthly payment. The chart above tracks variable rate mortgages alongside 1-year, 3-year, and 5-year fixed rates over the past 12 months. Fixed rates are influenced by Government of Canada bond yields, while variable rates follow the Bank of Canada's overnight rate decisions. Watch for rate inversions where short-term rates exceed long-term rates, often signaling expected future rate cuts.
Prime Rate History
The Bank of Canada prime rate is the foundation for all variable-rate mortgages and home equity lines of credit (HELOCs) in Canada. When the Bank of Canada adjusts its overnight lending rate—typically during one of its eight annual rate announcements—commercial banks respond by changing their prime rate within days. If you have a variable-rate mortgage quoted as "prime minus 1.0%", your actual interest rate moves in lockstep with prime rate changes. The prime rate also affects personal lines of credit, car loans, and business lending rates across Canada. Monitoring prime rate movements helps homeowners with variable mortgages budget for potential payment changes and decide whether to lock into a fixed rate.
Understanding Canadian Mortgage Rate Types
Prime Rate
The prime rate is the interest rate Canadian banks charge their most creditworthy customers and serves as the benchmark for variable-rate lending products. Currently at 4.45%, the prime rate is directly tied to the Bank of Canada's overnight rate. When you see a variable mortgage advertised as "prime minus 0.90%", your actual rate would be 3.55%. The prime rate affects millions of Canadian borrowers with variable mortgages, HELOCs, and lines of credit.
Variable Rate Mortgage (Closed Convertible)
A variable rate mortgage has an interest rate that fluctuates with the Bank of Canada prime rate, typically starting lower than fixed-rate options. "Closed" means you have limited prepayment privileges (usually 15-20% annually) without penalties, while "convertible" allows you to switch to a fixed-rate mortgage at any time without breaking your contract. Variable rates appeal to borrowers who believe rates will remain stable or decrease, and who can handle potential payment fluctuations. Historically, variable rates have saved borrowers money over fixed rates approximately 80% of the time over 5-year periods, though past performance doesn't guarantee future results.
1-Year Fixed Mortgage Rate
A 1-year fixed mortgage locks your interest rate for 12 months, providing short-term payment certainty with maximum flexibility. This term suits borrowers who expect mortgage rates to drop within a year, plan to sell their property soon, or want to reassess their mortgage strategy annually. The trade-off is more frequent renewals and exposure to rate changes each year. "Insured" indicates mortgages with less than 20% down payment requiring CMHC, Sagen, or Canada Guaranty mortgage default insurance—these typically qualify for slightly lower rates than uninsured mortgages.
3-Year Fixed Mortgage Rate
The 3-year fixed mortgage offers a middle ground between short-term flexibility and long-term rate security. Your rate and monthly payments remain constant for three years, protecting you from potential Bank of Canada rate increases during this period. This term appeals to homeowners who want predictability but anticipate life changes—such as a job relocation, growing family, or income increase—that might prompt refinancing before a 5-year term ends. Breaking a 3-year mortgage early typically incurs lower penalties than longer terms since penalties are often calculated on remaining term.
5-Year Fixed Mortgage Rate
The 5-year fixed mortgage is Canada's most popular mortgage term, chosen by approximately 70% of Canadian homebuyers. It provides five years of completely predictable monthly payments, making household budgeting straightforward regardless of Bank of Canada interest rate decisions. While 5-year fixed rates are typically higher than shorter terms or variable rates, you gain peace of mind and protection against rate increases. This term is particularly popular among first-time home buyers who value payment stability as they adjust to homeownership costs. Note that the average Canadian moves or refinances within 3-4 years, so consider potential prepayment penalties before committing.
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