The Best Mortgage Rates in Canada
Quickly explore Canadian mortgage rates from bank and non-bank lenders. Find the best fixed or variable mortgage rate for your home buying needs.The best mortgage rates from Canada's Big 6 banks
Click on a bank’s name to see a full list of its posted and discounted mortgage rates.
Canadian mortgage rate news: April 2025
On April 16, 2025, the Bank of Canada announced that it would be holding its overnight rate at 2.75%. It was the Bank’s first rate hold after a series of seven consecutive cuts dating back to June 2024.
This isn’t spectacular news for home buyers, as variable mortgage rates will stay at their current levels until at least June 4, when the Bank makes its next rate decision. The lowest variable rates available are currently around 4%.
Fortunately, fixed mortgage rates remain fairly approachable.
As of April 16, some brokerages were offering three-year fixed rates for around 3.7% and five-year fixed rates for about 3.75%. Those aren’t mind-blowingly low rates, but they might be as good as they’re going to get for the time being.
Government bond yields, which help determine lenders’ fixed mortgage rates, have been in the same general range since February. Without a significant, sustained dip in yields, lenders won’t have much reason to lower their fixed rates.
While rates may not improve in the coming weeks, home buyers have a few things working in their favour. Housing stock is piling up, which should take some pressure off of home prices, and Donald Trump’s tariff war may not be the extinction-level event many had feared.
If you have job security, it’s actually not a bad time to be looking for a home.
Read more about the Bank of Canada's latest rate announcement.
The BoC makes policy interest rate announcements eight times a year. Here's what you need to know.Mortgage rate forecast
Will Canadian mortgage rates come down in 2025?
Canadian mortgage rates are expected to decrease further in 2025. When, and by how much, will depend on the state of the Canadian economy.
If the Bank of Canada continues cutting its overnight rate, variable mortgage rates might fall another 50 basis points in the first quarter of 2025. The Bank was quite aggressive in its rate cuts at the end of 2024, so it may be a little more tempered in its approach in 2025.
Fixed mortgage rates are trickier to read since they’re based on government bond yields. Economic turbulence generally drives yields, and fixed mortgage rates, downward. Since Canada’s economy seems to be stagnating more than stumbling, fixed rates may not decrease much in the early part of 2025.
4 ways to get the best mortgage rate
Borrowers with a credit score of 680 or higher tend to get the best mortgage rates.
Lenders perceive borrowers with high credit scores as lower risks. You’re still likely to be considered for a mortgage if you have a score of 600 or higher, but you may have to work with alternative lenders who offer higher rates.
Lenders look at a pair of debt service ratios when deciding whether to give someone a mortgage. The lower these ratios are, the better your chances of getting a lower mortgage rate.
Your gross debt service (GDS) ratio, which measures how much of your pre-tax household income goes toward housing costs, should not exceed 39% of your gross annual income.
Your total debt service (TDS) ratio, which includes GDS and other debts,should not be more than 44% of your pre-tax income.
Cobbling together a significant down payment can make you seem like less of a credit risk to lenders, who may then offer you a lower rate.
Making a down payment of at least 20% will also eliminate the need to purchase mortgage default insurance. These insurance premiums get added to your mortgage amount, where they’ll generate higher interest charges.
Negotiating your mortgage rate is a must. You can never assume that a lender’s first offer will be its best. Ask if the rate you’ve been presented can be improved upon.
No matter what answer you receive, tell your lender that you’ll think about it, and that you plan to do some comparison shopping before making a decision. The threat of losing your business could work to your advantage.
Comparing Canadian mortgage rates
The interest rate you’re charged has a huge impact on the total cost of your mortgage, so It’s important to compare rates before applying for a mortgage. Not comparing rates could lead to paying more for your mortgage than necessary.
When comparing rates, also compare lenders and mortgage options to ensure you get the product and service you need.
How to choose between lenders that offer similar mortgage rates
Compare other product features
To choose the right mortgage, make sure you’re looking at more than just the rate. The deciding factor might be something less obvious, such as:
Additional fees. Certain lenders may charge you broker or origination fees based on the size of your loan.
Rate type. Variable rates tend to offer more flexibility and lower prepayment penalties.
Portability. This can be a useful feature if you think you might purchase a different home during your mortgage term.
Prepayment privileges. Bigger’s generally better here.
Prepayment penalties. If there’s a chance you might break your mortgage, a product with lower prepayment penalties could save you a lot of money.
Compare APRs
The annual percentage rate (APR) includes the interest rate, fees and other closing costs that are set by the lender.
Looking at APR will give you a more accurate idea of the true cost of your mortgage. Two lenders might both offer a 4% mortgage rate on a similar product, but if their APRs differ, one will cost you more than the other.
What’s a "good" mortgage rate?
A good mortgage rate is the lowest possible rate you can qualify for based on the amount you need to borrow and the mortgage product that fits your needs.
According to Canada Mortgage and Housing Corporation, the average conventional mortgage lending rate for loans with 5-year terms was 7.18% in 2001, 4.57% in 2011, and 3.28% in 2021. Relative to the average, 5% would have been an excellent rate in 2001, but it wouldn’t have been so great in 2021.
Unfortunately, you can’t go back in time to score a better mortgage rate. All you can do to find the best deal is compare today’s current mortgage rates. Below, you can take a look at the average posted, or advertised, rates for certain conventional mortgage products at Canada’s chartered banks, according to the Bank of Canada.
TERM | Conventional Mortgage Rates |
|---|---|
1-year fixed | 6.09% |
3-year fixed | 6.54% |
5-year fixed | 6.49% |
Prime Rate | 4.95% |
Keep in mind that a lender’s advertised rate is only the beginning of the story. The mortgage rate you’re finally offered will be determined by your credit score and other personal financial factors.
Choosing the right mortgage interest rate type
There are three main types of mortgage interest to choose from in Canada: fixed-rate, variable-rate and hybrid.
In a nutshell | Benefits | Risks | |
|---|---|---|---|
Fixed-rate mortgage | You pay the same interest rate for the entire length of your mortgage term. | Predictable payments can be easier to plan for. | High prepayment penalties if you break your mortgage early. |
Variable-rate mortgages | Your interest rate rises or falls along with your bank’s prime rate. | If rates decrease, your mortgage gets cheaper. Can be switched to a fixed-rate at any time. | If mortgage rates rise and stay elevated, your mortgage could cost you significantly more than you budgeted for. |
Hybrid mortgages | Part of your mortgage is subject to a fixed rate of interest and the rest to a variable rate. | Can help you navigate a volatile rate environment. | Complicated; requires a good understanding of mortgage rate dynamics. |
Exposure to rate fluctuations | None. Your rate won’t change for the length of your term. | Significant. Your rate will change every time your bank’s prime rate increases or decreases. |
How Canadian mortgage rates are determined
Credit score
For the best mortgage rates, financial institutions are likely to require a credit score of at least 680. You can still get approved for a mortgage with a lower credit score, but you might have to borrow from a B lender that charges higher interest rates.
Credit history
If you have limited experience as a borrower, or have endured negative credit events, that’ll be reflected in your credit history. A brief or less-than-glowing credit history generally means paying higher rates to lenders that offer bad credit mortgages.
Down payment savings
Your down payment influences the size of the loan you need and the amount of risk your lender takes on. A larger down payment means more equity for you upfront and less risk for your lender, who might offer you a lower rate as a result.
The Bank of Canada’s overnight rate
The overnight rate is the interest rate financial institutions charge one another to borrow money. The Bank of Canada increases or decreases this rate based on the country’s inflation rate.
If inflation is rising too quickly, the Bank will try to curb it by increasing its benchmark rate to discourage spending and borrowing. If the economy is slowing and inflation is not a concern, the BoC will lower the overnight rate to stimulate economic activity.
Lenders' prime rates
When the overnight rate rises, it costs financial institutions more to borrow money from each other. To recoup their losses, banks pass on this expense to their customers by raising their prime rate.
Variable mortgage rates are directly tied to a financial institution’s prime rate. When a bank raises or lowers its prime rate, variable mortgage rates rise or fall to the same extent.
The government bond market
Canadian lenders’ fixed mortgage rates follow government bond yields quite closely. If five-year bond yields increase (which happens when bond prices fall), lenders might raise their five-year fixed mortgage rates.
Historically, five-year fixed rates have usually been around 150 basis points higher than the five-year bond yield.
The bond market does not affect variable mortgage rates.
Historical mortgage rates in Canada
Here’s a little data to give you an idea of how Canadian mortgage rates have fluctuated over time.
Annual averages: Posted fixed mortgage rates at Canada's major banks
Year | 1-Year Fixed Mortgage Rate | 3-Year Fixed Mortgage Rate | 5-Year Fixed Mortgage Rate |
|---|---|---|---|
$2,023.00 | 7.15% | 6.61% | 6.68% |
$2,022.00 | 4.46% | 4.90% | 5.65% |
2021 | 2.80% | 3.49% | 4.79% |
2020 | 3.25% | 3.79% | 4.95% |
2019 | 3.64% | 4.17% | 5.27% |
2018 | 3.47% | 4.23% | 5.27% |
2017 | 3.16% | 3.48% | 4.77% |
2016 | 3.14% | 3.39% | 4.66% |
2015 | 2.97% | 3.42% | 4.67% |
2014 | 3.14% | 3.70% | 4.89% |
2013 | 3.08% | 3.74% | 5.23% |
Frequently asked questions
What are the best mortgage rates in Canada right now?
What are the best mortgage rates in Canada right now?
As of April 2025, you can find fixed mortgage rates for around 3.7% at some mortgage brokerages, while variable rates are closer to 4%. The rate you’re offered will ultimately depend on factors like your credit score, total debt level and income, and whether you apply for your mortgage with a Big Six bank or through a broker.
How can I get a lower mortgage rate?
How can I get a lower mortgage rate?
You might be offered a lower mortgage rate if you provide a larger down payment or pay down your debts to lower your debt ratios and improve your credit score. It can also be worthwhile to compare rates among different lenders and negotiate the best rate possible with the one you decide to work with.
What happens at the end of a mortgage term?
What happens at the end of a mortgage term?
When your mortgage term ends you’ll have a few options to choose from. You can either:
Pay off your mortgage in full.
Renew your mortgage with either your current lender or a new lender.
Will I get a lower mortgage rate from a mortgage broker?
Will I get a lower mortgage rate from a mortgage broker?
Possibly. Unlike a bank’s mortgage advisor, a mortgage broker has relationships with multiple lenders. That allows them to shop around for the mortgage product that best suits your needs. Mortgage brokers can negotiate on your behalf and provide alternative paths to homeownership if your application is turned down.
What's the lowest mortgage rate in Canadian history?
What's the lowest mortgage rate in Canadian history?
From January to March 2021, it was possible to get a five-year fixed mortgage rate of 1.39%. From November 2021 to January 2022, you could find variable mortgage rates as low as 0.85%.
What are mortgage prepayment penalties?
What are mortgage prepayment penalties?
Prepayment penalties are fees that may be incurred if you pay off too much of your mortgage before the end of its term. If you have a closed variable-rate mortgage, your prepayment charge will be three months’ interest on the prepayment amount. For fixed-rate mortgages, the penalty is generally calculated using an interest rate differential (IRD), which varies by lender.
Is the rate the most important part of a mortgage?
Is the rate the most important part of a mortgage?
Finding the right mortgage depends on more than just the interest rate — though that’s a good place to start.
Interest rates don’t tell the whole story. Other factors worth comparing when looking at mortgage rates include:
Fees. Depending on where you get your mortgage, you may be charged various fees that you weren’t expecting. Alternative and private mortgages, for example, tend to include fees that Big Six banks don’t charge.
Prepayment flexibility. Some mortgage products allow more leeway in making prepayments than others. If you might be in a position to pay off your mortgage early, you won’t want a mortgage that charges stiff prepayment penalties for doing so.
Customer service. It might be a priority to work with a lender known for quickly answering questions or smoothly making adjustments to its clients’ mortgages.
DIVE EVEN DEEPER
Clay Jarvis
Clay Jarvis
Beth Buczynski
Beth Buczynski