Mortgage Rate History in Canada

Since 2020, Canadian mortgage rates have been on a wild ride: dipping to historic lows during the COVID-19 pandemic and then rising to levels not seen in more than a decade.

In such an environment, it’s tempting to think of rates as an area of constant chaos, but Canada’s mortgage rate history isn’t all that dramatic. For rates to go haywire, they generally need a relatively strong push from the global economy — high inflation, the occasional meltdown of the U.S. banking system — to set things in motion. Those events have been rare.

Whether you’re interested in historical mortgage rates because you’re shopping for a lender or because you’re a fellow housing nerd, we’ve got you covered.

We’ll start with a look at recent stats, which will be of more use to current home buyers, and then turn to some longer range figures that go back to 1980.

Recent mortgage rate history in Canada: 2013-2023

The following charts display the actual interest rates Canadian mortgage borrowers have agreed to from 2013 to 2023. The average mortgage rate during this period was 3.13%, according to NerdWallet’s analysis of data from Statistics Canada.

That seductively low average wasn’t simply the result of pandemic-era rates. Mortgage rates fell well below historical norms after the 2007-2009 global financial crisis and cruised along at these lower levels until COVID-19 infected the global economy.

Got your eye drops handy? Let’s dig into the data.

Fixed mortgage rates

Average mortgage rate: 3.28%.
Highest monthly average: 6.58% (insured), November 2023.
Lowest monthly average: 2.33% (insured), September 2015.

Average rate: 3.07%.
Highest monthly average: 6.14% (uninsured), November 2023.
Lowest monthly average: 1.82% (insured), February 2021.

Average rate: 3.19%.
Highest monthly average: 6%, (uninsured), November 2023.
Lowest monthly average: 1.9% (Insured), February 2021.

Variable mortgage rates

Average rate: 3.23%.
Highest monthly average: 7.7%, (insured), July 2023.
Lowest monthly average: 1.45% (uninsured and insured), October 2021.

Long-term mortgage rate history in Canada

When looking at mortgage rate data that goes back to 1980, you see a few dramatic spikes, particularly in 1981, 1985 and 1990. But overall, rates have trended steadily downward for the past 40 years.

Even those sudden spikes have moderated over time. Mortgage rates topped 21% during the inflation crisis that plagued the economy in 1981. The inflation-driven rates home buyers are seeing in 2024 aren’t even half of that.

Average rates:

One-year term: 7.13%.
Three-year term: 7.75%.
Five-year term: 8.36%.

Highest rates:

One-year term: 21.25%; August 12 to October 7, 1981.
Three-year term: 21.5%; August 12 to October 7, 1981.
Five-year term: 21.75%; August 12 to October 7, 1981.

Lowest rates:

One-year term: 2.79%; January 13, 2021 to March 16, 2022.
Three-year term: 3.39%; February 25, 2015 to September 13, 2017.
Five-year term: 4.64%; April 8, 2015 to June 29, 2016, and September 7, 2016 to July 12, 2017.

One way to track the movement of variable mortgage rates over the years is by looking at banks’ prime rates, which variable rates are based on. When a lenders’ prime rate rises or falls, variable mortgage rates follow suit.

Recently, variable mortgage rates have tended to be within one percentage point of lenders’ prime rates.

Average prime rate: 6.85%.
Highest prime rate: 22.75%, August 12 to September 2, 1981.
Lowest prime rate: 2.25%, April 22, 2009 to May 26, 2010.

Historical mortgage rates, home prices and mortgage payments

When looking at the high cost of housing in Canada, mortgage rates are a comparatively small part of the problem. As you’ll see in the following table, the increases to homeowners’ mortgage payments over the years have primarily been driven by rapidly escalating home prices.

	Average Home Price*	Average Posted 5-Year Fixed Mortgage Rate**	Average Mortgage Payment***
1983	$76,733	13.28%	$602
1993	$152,942	8.78%	$1,023
2003	$207,510	6.42%	$1,104
2013	$382,740	5.23%	$1,821
2023	$678,282	6.68%	$3,694

*Source: Canadian Real Estate Association. **Source: Bank of Canada. Rates are for conventional mortgages at Canada’s chartered banks. ***Based on a 25-year amortization and a 20% down payment.

Ironically, it’s the relatively low mortgage rates home buyers have enjoyed over the past decade-plus (minus the post-COVID-19 surge) that has eroded housing affordability in Canada.

Lower rates increase buying power for everyone, which leads to more buyers exploring the market. The increased demand creates competition, which can lead to bidding wars that drive prices up beyond historical averages.

Is it important to understand historical mortgage rates?

If you’re buying a home, it doesn’t hurt to know as much as you can about mortgage rates, how they work and how they impact the cost of being a homeowner.

In that sense, knowing why mortgage rates have shifted over the years can be beneficial, especially if you’re taking out a variable-rate mortgage and hope to get a sense of where your rate might be six to 12 months from now. For example, if the inflation situation in May of 2024 is similar to what it was in an earlier year, you might expect variable mortgage rates to behave the same now as they did then.

Overall, the only rates that really matter are the ones on offer when you’re buying a home. There will always be a full menu of these to choose from, either from Big Six banks, credit unions or B lenders.

You won’t negotiate a better deal by explaining to your bank what rates were like in 2015, but you might if you can show them what the lender down the street is offering today.