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The Best Current Mortgage Rates in Canada

You could save up to $11,944 over 5 years.*

Today's top rates in:

5-Year Variable
4.19%
5-Year Fixed
4.49%
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Compare mortgage rates from lenders across Canada

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Canadian Mortgage Rates Comparison

Evaluate Canada’s best mortgage rates in one place. RATESDOTCA’s Rate Matrix lets you compare pricing for all key mortgage types and terms.

Rates are based on an average mortgage of $300,000

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Written by Joel Kranc

What is a mortgage?

A mortgage is a loan generally used to buy a home, land or other real estate. The borrower or purchaser of the home agrees to pay a lender (often a bank) the principal amount plus interest over a set period of time. The property serves as collateral to secure the loan, should the borrower default.

Fixed vs Variable Mortgage Rate and Open vs Closed Mortgage Term

A fixed rate mortgage or loan, also called a term loan, is where the interest rate stays fixed for the entire length of one term (which you and your lender agree upon).

A variable rate mortgage is where the interest rate may change periodically during the term of the mortgage, but the monthly payment of the borrower will remain the same. As a result, payments towards the principal of your mortgage can increase or decrease depending on the interest rate.

The choice of fixed or variable depends on your tolerance for interest rate fluctuations. In a low interest rate environment, a variable rate could save you a lot of money, however if you like knowing your payments will stay the same, regardless of interest rate fluctuations, fixed is ideal.

Within mortgages consumers can opt for closed or open mortgages. Closed mortgages penalize you for paying off all or part of your mortgage early whereas an open mortgage is flexible and allows you to increase your regular payments or pay a lump sum each year.

Common mortgage amortization periods

The most common amortization period is 25 years. If you put at least 20% as a down payment you can increase to up to 30 years. Shorter amortizations of 15 or 20 years are also available to consumer looking for the best mortgage rates in Canada.

What is CMHC (Canada Mortgage and Housing Corporation) insurance?

Mortgage insurance or CMHC insurance is required for homeowners who purchase a home with a down payment of less than 20%. This insurance is meant to protect the lender, not you. The benefit is that it allows you to buy a home even if you have less than 20% of the purchase price saved for a down payment.

How do I know if I need CMHC insurance?

If you decide on purchasing a home with less than 20% of the down payment saved, you will need CMHC insurance.

How do you qualify for the best mortgage rates?

Getting the best mortgage rates requires five main things:

  1. A good credit score: You will generally need a 680 to 720 FICO score or above. Your co-borrowers, if any, will also need good credit. Like anything else, there are exceptions to this. But the more exceptions you require, the lower your chances of getting the best rate.
  2. Clean credit: Lenders want to see few, or no derogatory items on your credit report. One missed payment in three years might be okay; five missed payments are not, especially if they went to collections.
  3. Provable income: A lender will usually ask you to prove your full income with tax documents and/or employer pay stubs. You need a two-year history of any bonus income, commissions or part-time income.
  4. Reasonable debt ratios: If your monthly housing and payment obligations are more than 44% of your gross monthly income, you’ll seldom get the best rates. Moreover, your monthly housing costs (mortgage payment, property taxes, heat and half your condo fees) cannot be more than 39% of your gross monthly income. That 39% limit requires a 680+ credit score, by the way. Otherwise, it’s 35%. Remember this as well. To qualify for the lowest mortgage rates, you’ll have to pass the federal government’s mortgage stress test. All that means is that the lender will calculate your debt ratios using an inflated interest rate. If the lender is offering you a 3.25% rate, for example, it might stress test you to see if you can afford payments at a 5.25% rate.
  5. Sufficient employment tenure: If you just started your job, you may not qualify with some lenders. Many lenders prefer to see at least a one-year job history if you’re salaried. But again, there are exceptions for those who aren’t salaried. If you're self-employed, you'll likely have to reflect more information about your income and there may be an upper limit to how much you can borrow. See our guide to getting a mortgage as a self-employed person in Canada, here.

What affects mortgage rates in Canada?

  • External factors: So much of the economy is intertwined with one element influencing others. Mortgages fall into this pattern and can be influenced by many factors. For example, as inflation has risen around the world, and here at home, central banks have raised interest rates to slow the market. As the Bank of Canada has raised rates to curb inflation, the major banks have followed suit and raised mortgage rates for consumers. This has had the effect of slowing demand and sales, leading to house prices falling as inventory grows.
  • Bank of Canada rate: In July 2022, the Bank of Canada has raised its benchmark interest rate by the largest amount in more than 20 years. Since the interest rate cutting measures used during the pandemic, the BoC has raised rates at least four times since March 2022 as part of an aggressive campaign to fight inflation.
  • Bond market: Due to expectations of an economic downturn, bond yields, which lead fixed mortgage rates, have been falling. The thinking is that inflation may be nearing its peak, but the recession risk is real. In that case, lower growth and lower inflation could lead to lower mortgage rates later this year and into 2023.
  • Supply and demand on real estate: Market demand can also affect mortgage rates. As demand heats up, prices for homes go up but competition from lenders could be a bonus for home buyers looking to buy homes, with banks offering lower rates to win business.
  • Factors that determine your own mortgage rate: Yes, inflation, supply and demand, and the Bank of Canada will influence mortgage rates and trends but there are factors that affect you personally. For example:
    • Credit score – This will show lenders your trustworthiness and how likely you are to pay down debt
    • Down payment – The more you save and have for a down payment, the lower your rate may be. Lenders want to reduce risk and so if you have more to put down towards your house, the more you may get a lower rate.
    • Type of rate – If you choose a fixed rate mortgage your payment and rate will stay the same throughout your full term. A variable rate mortgage will fluctuate based on the prime lending rate set by the lender.
    • Mortgage loan term – Choosing fixed rate mortgages can allow you to lock into lower rates if, for example, you choose a 5-year term versus a shorter 1-year term.

How to get the best mortgage rates

The best mortgage rates change almost weekly. And RATESDOTCA tracks them all.

But getting the true best mortgage rate isn’t as simple as it seems. That’s because, contrary to popular opinion, the best mortgage rate is often not the lowest mortgage rate. The best mortgage rate is one that minimizes your overall borrowing costs. You can virtually never know that by merely looking at the rate itself. Prudent mortgage research entails more of a process.

It starts with finding the lowest mortgage rates for the most suitable term. That serves as your “shortlist” of mortgage options. You can then review the conditions and features that apply to each rate until you find a mortgage that checks all your boxes.

The pros and cons of comparing mortgage rates online

Getting an online mortgage can be a great option for consumers who prefer a fully digital experience – from approval to renewal – compared to an in-person transaction at a traditional financial institution.

If you’re considering that approach, be aware of the advantages and disadvantages:

Pros

  • Convenience: With an online mortgage, you’ll never have to set foot in a bank or credit union. You’ll be able to apply for and secure your loan entirely online – either through an online application or app. The underwriting process may also be shorter, so your loan could be approved faster online.
  • Comparison shopping: If you’re looking for easy access to a wide-range of mortgage rates, an online mortgage application will make them easily available.
  • Discounts: Online mortgage lenders don’t have the same overhead costs as brick and mortar banks. As a result, they may be able to pass on savings to consumers.

Cons

  • Service: Keep in mind that while you may get service over the phone, such online brokers or lenders may not have a physical location you can visit to speak to someone. So, if that’s something you prefer, the online route may not be right for you.
  • Rate guarantees: While you may be offered a certain rate online, this rate is not a guarantee, as you have to go through further verification to get your final rate.
  • Safety: Hacking and data breaches are a potential vulnerability with all lenders since they are all online now. However, all financial institutions in Canada go to great lengths to ensure that customer data is protected.

Mortgage tips for the first-time homebuyer

Buying your first home can be stressful. It’s likely the largest investment you’ll ever make. Here are some helpful mortgage tips to relieve some of that stress.

  1. Get a pre-approval: Go to your lender to lock in the lowest mortgage rates in Canada and amortization period before you make your purchase. Once you find the home of your dreams you’ll have already prepared yourself for the loan process to move quickly and smoothly.
  2. Don’t stress about the 20% down payment: You may qualify for CMHC or mortgage insurance that allows you to provide a lower down payment while providing your lender peace of mind that their loan is secured.
  3. Comparison shop: RATESDOTCA is your best place to compare mortgage rates from Canada’s top lenders. You’ll get quick quotes and be put in touch with a lender or broker who will be happy to help yo on your journey.
  4. Pay down debt: Before embarking on one of, if not the largest loan of your life, pay down other credit car debts to free capital. You’ll also help raise your credit score, which will be a positive place to start when talking to lenders.
  5. Review your budget: Knowing what you can afford will help you in your journey to get the best mortgage rates in Canada. Assess what the costs of home ownership will be to know what you can afford when you speak with lenders.

Historical Canadian mortgage rates

Rates have been trending downward in Canada for the last five years. The ebbs and flows are caused by changes in Canada’s bond yields (driven by Canadians economic developments and international rate movements, particularly U.S. rate fluctuations) and the overnight rate (which is set by the Bank of Canada).

As of August 2022, there has been a 225 bps increase in the prime rate, since beginning of year 2022, from 2.45% to 4.70% as of Aug 24th 2022.

The following are the historical conventional mortgage rates offered by the 6 major chartered banks in Canada in the past 20 years.

Mortgage Rates Posted By Major Chartered Banks in Canada

Year Conventional Mortgage - 5 Year Conventional Mortgage - 3 Year Conventional Mortgage - 1 Year Prime Rate
07/27/20226.14%5.64%5.19%4.70%
07/20/20226.04%5.39%4.74%4.70%
06/22/20226.04%5.24%4.69%3.70%
06/15/20225.64%4.89%4.29%3.70%
06/08/20225.39%4.49%3.79%3.70%
05/25/20225.39%4.49%3.79%3.20%
04/20/20224.99%3.89%3.09%3.20%
03/23/20224.79%3.49%2.94%2.70%
03/09/20224.79%3.49%2.79%2.70%
01/05/20224.79%3.49%2.79%2.45%
20214.79%3.49%3.09%2.45%
20205.19%3.94%3.64%3.95%
20195.34%4.29%3.64%3.95%
20184.99%3.74%3.24%3.2%
20174.64%3.39%3.14%2.7%
20164.64%3.39%3.14%2.7%
20154.79%3.44%3.14%3%
20145.34%3.95%3.14%3%
20135.24%3.7%3%3%
20125.29%4.05%3.5%3%
20115.19%4.15%3.35%3%
20105.49%4.25%3.6%2.25%
20096.75%6.25%5.6%3.5%
20087.55%7.54%7.35%6%
20076.45%6.4%6.3%6%
20066.3%6%5.8%5%
20056.05%5.6%4.8%4.25%
20046.35%5.8%4.75%4.5%
20036.7%6%4.9%4.5%
20026.85%5.75%4.6%4%
20017.95%7.8%7.7%7.5%

All rates presented in this table are the most typical of those offered by the six major Canadian chartered banks in the beginning of each year.

Source: Bank of Canada

Frequently asked questions about mortgages in Canada

How can I find the best mortgage rates in Canada?

The first place to get the lowest and best mortgage rates in Canada is RATESDOTCA. We will help you compare mortgage rates in Canada and quickly provide quotes as you embark on home ownership.

You can also speak with mortgage brokers who are working for you and will bring you the best rates from a variety of competing lenders. They are not employed by lenders and are required to advise and help you find the best mortgage rates in Canada.

Which mortgage type is the best for the first-time homebuyer?

Everyone is different and operates in different circumstances. If you prefer to know your payments regardless of interest rate fluctuations, then a fixed-rate mortgage is best for you. If you can tolerate market fluctuations, perhaps a variable rate mortgage would suit you. It’s best to talk to your lender about options and what makes sense based on your financial means.

What is a high ratio mortgage?

A high-ratio mortgage is when you make a down payment of less than 20%. This means you have a loan-to-value ratio of more than 80% form your lender. When this occurs, you will be required to take CMHC insurance to protect the lender.

Are the lowest mortgage rates usually online?

Sites like RATESDOTCA can offer you comparison rates from a variety of lenders and usually provide the lowest rates available. Mortgage brokers can also provide advice and comparisons from a variety of lenders for the best mortgage rates in Canada.

What is your prediction for Canadian mortgage rates in 2022?

There is a market consensus that the Bank of Canada may likely increase interest rates to a high of 3.25% by the end of 2022 with a potential worst-case scenario of 3.5%. However, bond yields are starting to flatten as they have already priced in the Central Bank’s rate hikes. As this occurs, there are very early indications that rates could be dropping again, perhaps in early 2023.

Who provides the best mortgage rate in Canada?

The best default insured rates (for people with down payments less than 20%) are typically quoted by mortgage brokers. The best uninsured rates, especially for borrowers with less than 20% down payments, generally come from banks. Some of the most competitive conventional lenders are the new e-banks, which we display in our rate tables.

How can I calculate my mortgage payments?

This Mortgage Payment Calculator shows you your payments and amortization for any rate(s) you find on this website. You can even assume lump-sum prepayments to estimate how much faster you’ll be able to pay down your loan.

Are “Low Frills” mortgages worth it?

Restricted mortgages (a.k.a. “low frills mortgages") have boomed in popularity the last five years. Lenders realize that consumers want the lowest rate, so they’ve tried to strip out features from their mortgages to get the pricing lower. For some borrowers who plan no financing changes for five years, low-frills mortgages may make sense. For most Canadians, the small rate savings isn’t worth the much higher potential costs after closing. Those costs can bite you if you break, port, increase or otherwise refinance before your mortgage maturity date. Hence, for the majority of homeowners, it’s worth the small premium for a “full-featured” mortgage

Do I get a lower rate if I make a bigger down payment?

Generally, not. The lowest rates in Canada are typically offered on default insured mortgages. Those are for people who put down less than 20% on their home purchase. Low insured rates are also available to people who transfer their already-insured mortgage to a new lender. Those who put down 20% or more get conventional rates, which are usually (but not always) higher than insured rates. Occasionally, however, someone putting down 35% or more on a home purchase under $1 million can get great rates similar to high-ratio rates.

*Based on the difference between estimated deep-discount 5-year fixed rates from Canada's top six banks and the lowest comparable rates on RATESDOTCA, as of January 14, 2022.

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