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Rates are based on an average mortgage of $500,000 and subject to change based on filter criteria.
Lender
|
Insured
|
Insurable
|
Uninsured
|
|---|---|---|---|
Lendwire Inc.
|
4.04%
$2,640.95 / month
|
4.24%
$2,695.56 / month
|
4.24%
$2,695.56 / month
|
Lendwire Inc
|
4.04%
$2,640.95 / month
|
4.24%
$2,695.56 / month
|
4.24%
$2,695.56 / month
|
MMG Mortgages
|
4.19%
$2,681.85 / month
|
4.39%
$2,736.87 / month
|
4.29%
$2,709.29 / month
|
Innovation Federal Credit Union
|
4.57%
$2,786.86 / month
|
4.57%
$2,786.86 / month
|
4.57%
$2,786.86 / month
|
BMO
|
4.60%
$2,795.23 / month
|
4.79%
$2,848.54 / month
|
4.79%
$2,848.54 / month
|
Rocket Mortgage
|
4.74%
$2,834.47 / month
|
4.89%
$2,876.79 / month
|
4.74%
$2,834.47 / month
|
Nuborrow
|
5.49%
$3,049.05 / month
|
5.49%
$3,049.05 / month
|
5.49%
$3,049.05 / month
|
True North Mortgage
|
3.49%
$2,493.71 / month
|
3.49%
$2,493.71 / month
|
3.49%
$2,493.71 / month
|
Sudbury Credit Union
|
3.99%
$2,627.39 / month
|
3.99%
$2,627.39 / month
|
3.99%
$2,627.39 / month
|
First Foundation
|
3.99%
$2,627.39 / month
|
3.99%
$2,627.39 / month
|
3.99%
$2,627.39 / month
|
Prospera Credit Union
|
4%
$2,630.10 / month
|
4%
$2,630.10 / month
|
4%
$2,630.10 / month
|
City Wide Financial Corp
|
4.09%
$2,654.55 / month
|
4.09%
$2,654.55 / month
|
4.09%
$2,654.55 / month
|
Hypotheca
|
4.09%
$2,654.55 / month
|
4.09%
$2,654.55 / month
|
4.09%
$2,654.55 / month
|
Vancity Mortgages
|
4.09%
$2,654.55 / month
|
4.09%
$2,654.55 / month
|
4.09%
$2,654.55 / month
|
ATB Financials
|
4.09%
$2,654.55 / month
|
4.09%
$2,654.55 / month
|
4.09%
$2,654.55 / month
|
Centum Clinton Wilkins
|
4.14%
$2,668.19 / month
|
4.14%
$2,668.19 / month
|
4.14%
$2,668.19 / month
|
Nesto
|
4.14%
$2,668.19 / month
|
4.14%
$2,668.19 / month
|
4.14%
$2,668.19 / month
|
Centum Home Lenders Ltd.
|
4.14%
$2,668.19 / month
|
4.14%
$2,668.19 / month
|
4.14%
$2,668.19 / month
|
Rates are based on an average mortgage of $500,000
| Insured | 80% LTV | 65% LTV | Uninsured | Bank Rate | |
|---|---|---|---|---|---|
| 1-year fixed rate | 5.04% | 4.59% | 4.59% | 6.63% |
5.94%
|
| 2-year fixed rate | 4.64% | 4.89% | 4.64% | 4.64% |
5.54%
|
| 3-year fixed rate | 4.14% | 4.14% | 4.14% | 4.19% |
4.89%
|
| 4-year fixed rate | 4.24% | 4.14% | 4.14% | 4.49% |
4.74%
|
| 5-year fixed rate | 3.99% | 3.99% | 3.99% | 4.14% |
4.59%
|
| 7-year fixed rate | 4.44% | 4.39% | 4.39% | 5.90% |
5.50%
|
| 10-year fixed rate | 5.09% | 5.29% | 5.29% | 5.80% |
7.14%
|
| 3-year variable rate | 5.10% | 5.20% | 5.10% | 5.10% |
7.35%
|
| 5-year variable rate | 4.80% | 4.90% | 4.80% | 4.80% |
5.15%
|
| HELOC rate | N/A | N/A | N/A | N/A | N/A |
| Stress test | 5.25% | 5.25% | 5.25% | 5.25% | N/A |
Updated
A mortgage is a loan taken on 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.
A fixed rate mortgage or loan, also called a term loan, is where the interest rate stays fixed for the entire length of the term (which you and your lender agree upon). For instance, if you get a fixed rate of 4% for a 5-year term, your interest rate and monthly payment will remain the same during those 5 years.
A variable rate mortgage is where the interest rate may change periodically during the mortgage term depending upon economic conditions and the Bank of Canada’s interest rate. While some lenders may keep your monthly payment fixed, other lenders may have your mortgage payment increase or decrease as variable rate fluctuates. This depends on the type of variable rate mortgage (VRM) you choose – between standard VRM, capped VRM and adjustable rate mortgage (ARM). A standard VRM is the one where the payment will be constant during the term with a fluctuating interest rate and the mortgage balance may increase or decrease depending on the rate alteration. The borrower is given adequate notice of the increase in interest rate. A capped VRM is one where the payment is constant during the term with a fluctuating interest rate but only up to the cap rate.
The choice of fixed or variable depends on your appetite for interest rate fluctuations. In a low interest rate environment, a variable rate could save you a lot of money, however if the opposite is true, a variable rate mortgage may seem daunting as your payments fluctuate with the changing rate. On the other hand, with a fixed mortgage rate you don’t have to worry about rate hikes or cuts during the term of your loan.
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.
The most common amortization period in Canada is 25 years. But this has changed since the Bank of Canada rate hike spree began in March 2022.
The Bank of Canada notes that homeowners are beginning to stretch their budgets by looking for mortgages with amortization periods beyond 25 years. In 2019, the share of buyers seeking longer time frames was at 34% and in 2022 the number rose from 41% to 46% — nearing half of all buyers. In some cases, they are now going as high as 40 years. At the end of 2023, a historically low number i.e. 12% of new mortgages had a loan-to-income ratio above 450%. Also, 47% of new mortgages had an amortization period longer than 25 years, up from 34% in 2019.
The Bank of Canada says, “A longer amortization period reduces the size of monthly payments, helping lower debt-servicing costs, but increases the period of household vulnerability because equity is built more slowly.”
Most recently, the Government of Canada has introduced a new incentive that lets first-time home buyer purchase their first home in Canada with a longer amortization period. Starting August 1, 2024, lenders will be offering 30-year amortization to eligible first-time home buyers purchasing a newly constructed home in Canada.
Mortgage loan insurance is required for homeowners who purchase a home with less than 20% down payment. This insurance is meant to protect the lender, not you. Your lender pays an insurance premium on mortgage loan insurance. It’s calculated as a percentage of the mortgage and is based on the size of your down payment. Your lender will pass this cost on to you. You can pay it in a lump sum or blend it in your mortgage payments.
The benefit of mortgage loan insurance is that it allows you to buy a home even if you have under 20% of the purchase price saved for a down payment.
If you purchase a home with less than 20% down payment, you will need mortgage insurance. Your lender needs to protect itself from the risk in case you are unable to meet your loan commitment.
There are primarily three mortgage insurance companies in Canada that provide mortgage insurance. Canada Mortgage and Housing Corportation (CMHC), a government-owned entity that operates independently, provides mortgage loan insurance products on various property types including duplexes, condominiums, manufactured or mobile homes and many more, including rental and retirement homes. Private lenders Canada Guaranty and Sagen also provide mortgage insurance to Canadian homebuyers.
In this past decade, Canadian borrowers have seen interest rates go from historic lows to highs not seen in decades. This has had the effect of changing how buyers can qualify for mortgages and the stress tests placed on them to assess risk. Between March 2022 and July 2023, Canadian home buyers have seen Bank of Canada’s (BoC) policy interest rate hike at least 10 times, making mortgage interest rates reach historical highs. The BoC finally reduced interest rate in June 2024, the first time in two years and more rate cuts are expected going in to 2025.
The Canadian government introduced the Mortgage Stress Test back in 2016 for mortgage holders who were making a down payment of between 5% and 19% and were required to purchase mortgage default insurance. In 2018, the Office of the Superintendent of Financial Institutions — the government agency that regulates federally incorporated lenders — changed the stress test to include buyers who make a down payment of at least 20% and are uninsured.
The most recent changes to the stress test introduced a new mortgage qualifying rate for all uninsured and insured mortgage applications submitted on or after June 1, 2021. As per the new changes to stress test, buyers must prove they can handle payments based on either the benchmark rate of 5.25% or the rate offered by your lender plus 2% – whichever is higher.
But even with more stringent requirements getting the best mortgage rates requires five main things:
The best mortgage rates change 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.
Deciding on the percentage of down payment is a very important part of your home ownership journey. The money you put towards down payment would determine your mortgage Loan-To-Value (LTV).
Generally, a 80% or higher loan-to-value (borrowers paying less than 20% down payment) means higher risk for the lender. This risk is offset by mortgage loan insurance offered by CMHC, Sagen or Canada Guaranty. The fact that the lender will make up for the loss in case of default can result in the lender offering lower mortgage rates.
When a borrower pays 20% or more down payment, the mortgage does not have to be insured. The borrower has higher equity in their property but the lender takes on the risk as there’s no mortgage insurance to cover them in case of default. A lower loan-to-value ratio can result in higher interest rates as the lenders’ risk is higher.
Having said that, the mortgage rate you receive can also be influenced by other factors such as your credit score, the type of loan, and current market conditions.
| Down payment percentage | Mortgage Balance | Mortgage Rate (Based on 5-year fixed rate) | Total Interest paid during the 5-years term | Monthly Payment | CMHC Premium |
|---|---|---|---|---|---|
| 5% | $570,000 | 4.79% (Insured) | $127,652 | $3,247 | $22,800 |
| 10% | $540,000 | 4.79% (Insured) | $120,933 | $3,076 | $16,740 |
| 20% | $480,000 | 5.04% (Uninsured) | $113,261 | $2,802 | $0 |
Calculators used: Mortgage Insurance Calculator and Canadian Mortgage Payment Calculator
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:
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.
The Canadian economy, like other economies around the world, has been on a roller coaster ride since the COVID-19 pandemic. In response to the pandemic, the Bank of Canada significantly lowered its key interest rate to 0.25% in March 2020 to give impetus to the economy. Mortgage rates were at historic lows, with 5-year fixed rates dropping below 2%.
As a result, inflation began to rise to historic levels, and to control borrowing, the Bank of Canada tightened its monetary policy. Starting March 2022, the BoC began its rate hike spree to curb inflation so by the end of that year, the bank’s interest rate had risen to 4.25%.
After a series of 10 rate hikes, Bank of Canada’s key interest rate recorded a peak of 5% in July 2023. Parallelly, mortgage rates continued to rise as well, making it difficult for new homebuyers to enter the market and existing borrowers strapped to make ends meet.
The Bank paused rate hikes between July 2023 and May 2024, finally taking a 25 basis points cut in June 2024. The inflation rate also slowly came down from 8% in June 2022 to 2.7% in June 2024, owing to the Bank’s tight monetary policy.
Let’s look at interest rates posted for selected products by the major chartered banks: