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Which Big Six bank has the best current mortgage rates?
Canada’s biggest banks tend to offer similar mortgage rates, so determining which offer is best for you should include looking at other details, like prepayment privileges and portability.
Click on a bank’s name to see a full list of its current mortgage rates, including posted and discounted mortgage rates.
Current mortgage rate update: December 18, 2024
The big mortgage news this week relates to new lending rules that should make homeownership more attainable for some Canadians. Combined with lower variable mortgage rates, the new rules should create a fairly busy winter for the housing market.
Variable rates are stable now that lenders have absorbed last week’s overnight rate decision by the Bank of Canada. The Bank delivered an early Christmas present by reducing the overnight rate by 50 basis points, which brought the lowest advertised variable rates down to around 4.3% at some mortgage brokerages. Variable rates remain closer to 5% at the country’s biggest banks.
Fixed rates aren’t quite as volatile these days, but they could be set for a slight increase. Three- and five-year government bond yields, which determine fixed mortgage rates, have risen over the last two weeks. The increases have been small, but they may be enough for lenders to up their three- and five-year fixed mortgage rates. As of December 14, Canada’s lowest advertised five-year fixed rates are around 4.15%.
Shorter-term fixed rates, the option of choice among many recent home buyers, will cost you a little more. (That’s the unfortunate result of higher demand.) As of December 18, two-year terms could be found for 4.89%, while one-year terms are closer to 6%.
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Mortgage rate trends to watch in 2025
Will fixed mortgage rates decrease in 2025?
The mortgage experts NerdWallet spoke to toward the end of 2024 don’t expect fixed mortgage rates to decline significantly in 2025. But fixed rates can be hard to predict over the long term.
It all depends on how investors treat the government bond market. If they go on a buying spree and bond yields fall, fixed mortgage rates should, too. This scenario might require a little economic upheaval to come to fruition, and there’s no shortage of that on the horizon.
Will variable mortgage rates fall in 2025?
Yes. How much further they’ll fall depends on the overnight rate.
The BoC cut the overnight rate steadily from June to December, and doesn’t have much room before reaching its “neutral rate.” That’s the range where the overnight rate is neither throttling or encouraging economic activity.
The neutral rate is 2.25% to 3.25%. The overnight rate is 3.25%. Variable rates could drop another 50 basis points if the Bank’s aiming for the middle of its neutral rate.
How does prime rate affect current mortgage rates?
| BMO | 5.45% |
| CIBC | 5.45% |
| National Bank | 5.45% |
| Scotiabank | 5.45% |
| RBC | 5.45% |
| TD | 5.45% |
A lender’s prime rate is typically used to set its current variable mortgage rates. That’s why you’ll often see banks’ variable mortgage rates described as “prime minus X%” when you visit their rates pages.
The prime rate at all Big Six banks is currently identical. That’s because each bank bases its prime rate on the Bank of Canada’s overnight lending rate. When the overnight rate rises or falls, so does prime.
It’s worth noting, however, that TD is unique among Canadian banks in that they have their own prime mortgage rate, which is currently 5.6%.
Terms to know when comparing current mortgage rates
Fixed mortgage rates
A fixed mortgage rate will not change for the entirety of your mortgage term, which is how long your current mortgage contract is in effect. Even if mortgage rates rise or fall during your term, the rate attached to your mortgage will not change — nor will the principal and interest portions of your mortgage payment.
Variable mortgage rates
A variable mortgage rate could rise or fall during the mortgage term. That’s because variable mortgage rates are based on lenders’ prime rates, which increase or decrease whenever the Bank of Canada adjusts its overnight rate.
Posted rates
These are a bank’s publicly advertised mortgage rates. They’re higher than its special rates. One theory behind why posted rates are so high is that they are intended to be negotiated down during mortgage discussions to make borrowers feel as if they scored a great deal. And if a borrower doesn’t negotiate, the bank can charge the full posted rate and make more money.
Special rates
These are posted rates that have been discounted. Some banks’ discounted rates are also the rates they offer their mortgage broker partners.
APR
Many lenders publish mortgage interest rates alongside corresponding annual percentage rates (APR). An APR includes any additional fees the lender may charge, so it’s a more accurate indication of what a mortgage might cost. When comparing current mortgage rates among lenders, always try to compare APRs to get a more accurate sense of what each loan might cost you.
Nerdy Tip: Make yourself familiar with a bank’s posted and discounted rates to put yourself into a stronger negotiating position. No matter how well you prepare yourself, however, know that the rate you’re offered will ultimately depend on your financial situation.
Current mortgage rates and the stress test
In addition to affecting the cost of your home loan, current mortgage rates also impact how much mortgage you can qualify for by influencing the mortgage stress test.
If you’re applying for a mortgage at a federally regulated financial institution, the stress test requires you to qualify at either 5.25% or the rate being offered plus 2%, whichever is higher. If a lender offers you a rate of 5%, for example, your finances would have to support the same loan at 7% for you to qualify.
If that’s not the case, your lender will reduce the amount you’re offered until you can pass the stress test at the qualifying rate.
Do these 3 things for a better mortgage rate
Boost your credit score
A credit score of 680 or higher will help you get approved for a mortgage at most Canadian lenders. With a longer list of lenders willing to work with you, you’ll have more offers to choose from — and a better shot at being offered the best mortgage rate.
Before applying for a mortgage, check your credit score. If there are some financial habits you can tweak to improve your credit score, get tweaking.
If your credit score is below 680, you should still be able to apply for a mortgage with a B lender.
Pay down debt
If you’re carrying debt from a credit card, personal loan or line of credit, lenders may question your ability to afford a mortgage payment. Any risk they see could give them a reason to offer you a higher rate.
Negotiate
Don’t accept the first rate offer you’re presented with.
Negotiating is a must during the mortgage process. Even if your lender isn’t willing to decimate its rate offer for you, getting a little shaved off your rate can make a significant difference.
Here’s a quick example using a mortgage of $400,000.
- At 5% interest, your monthly mortgage payment would be $2,326.
- At 4.8% interest, your monthly mortgage payment would be $2,281.
In this case, a few minutes negotiating a slightly lower rate could save you about $50 every month.
Frequently asked questions about current mortgage rates
Fixed mortgage rates aren’t expected to dip any further in late 2024 or early 2025. Variable mortgage rates will continue decreasing each time the Bank of Canada lowers its overnight rate. After two aggressive cuts in October and December, the Bank may not touch the overnight rate until March 2025.
As of December 2024, 5% would be significantly higher than what many banks and brokerages are offering on three- and five-year fixed-rate mortgages. You’re unlikely to find a rate of 5% on shorter fixed-rate terms. For a variable-rate mortgage, you might pay around 5% for the rest of the year if you get your mortgage from a Big Six bank.
When getting a mortgage, you can go directly to a lender, like a bank, or work with a mortgage broker.
Generally speaking, a mortgage broker should offer you a wider array of options. Unlike a bank’s mortgage advisors, brokers aren’t tied to a single financial institution. They can field offers from multiple lender partners, which might include B lenders and private lenders, in addition to some Big Six banks.
Part of a mortgage broker’s job is to negotiate a better rate for you. They only earn a commission when a mortgage is finalized, so it’s in their best interest to negotiate a mortgage you can afford to sign. Bank employees with revenue targets, however, may not feel quite as motivated to cut you a deal.
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