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The Best Mortgage Rates in Canada

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

Today's top rates in:

5-Year Variable
3.44%
5-Year Fixed
4.24%
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Compare mortgage rates from lenders across Canada

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Canadian Mortgage Rate Comparison (Rate Matrix)

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

Insured 80% LTV 65% LTV Uninsured Editor's Tips
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Finding the best mortgage rate in Canada

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.

RATESDOTCA makes it easy to do that. The page you’re on helps you compare current mortgage rates side by side. You can evaluate payments, rate holds and prepayment flexibility, and then visit each lender for more details.

How banks & mortgage lenders determine their mortgage rates

Mortgage rates in Canada are determined by a range of factors.

On one hand, external economic forces have considerable effect, on the other, the profile of the mortgage applicant is significant.

External factors include:

  • The overall economy, including what’s going on domestically and internationally:

The cost of your mortgage is affected by interest rates.

When the economy is strong, interest rates tend to be higher. This is because the central bank raises interest rates when employment and inflation are high to help moderate demand, and does the inverse when they are weak.

When lenders pay more to borrow, they will charge you more in interest on a mortgage as a result.

Since many mortgage lenders in Canada borrow funds from investors abroad, the state of the global economy is also relevant.

If it costs more for banks to borrow money, it’s likely that your mortgage will be more expensive.

  • The Bank of Canada interest rate:

One of the core functions of Canada’s central bank, also known as The Bank of Canada, is to help preserve the value of the Canadian dollar so Canadians and their financial institutions can confidently make investment decisions.

One of the key factors affecting the cost of your mortgage is the BoC’s interest rate. It affects the prime rate that mortgage lenders charge consumers; when the BoC’s interest rate changes, prime rates are likely to change, too.

This is especially significant for Canadians who have a variable-rate mortgage. If the prime rate increases, the cost of their mortgage will also increase.

  • The bond market:

Banks finance the cost of holding mortgages through government bonds, which are guaranteed to be repaid.

There’s a strong correlation between government bond yields and fixed mortgage rates: When bond yields go down, fixed mortgage rates are also lower.

  • You, the mortgage applicant:

Your financial circumstances also have a significant impact on the mortgage rate that a lender will offer.

Their goal will be to gauge what sort of risk they assume in lending you money. When a lender is more confident of your ability to repay a mortgage, you’re likely to receive a lower mortgage rate.

To understand what sort of risk you are, a lender will closely consider the following:

  • Your credit score. A high score will help confirm to a lender that you have a history of consistently repaying previous loans.
  • The amount of your down payment can be an indicator of your financial stability. For example, if you’re borrowing for a down payment, a lender may consider you a greater risk and offer you a higher mortgage rate.
  • Your income and job security, in other words, your ability to repay any loan, in full and on time.

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). 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
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

How to get the best mortgage rates

Before you start comparing mortgage rates, it’s key to remember that the best mortgage rates depend heavily on 10 factors:

#1 Factor: Mortgage vs. Refinance

Mortgages on refinances, for example, usually cost more than mortgages for purchases. That’s because refinances are deemed higher risk and because refinances cannot be default insured.

Jargon Buster: Default insurance protects the lender in case you don’t pay your mortgage. Insurance is either:

  • Optional (a lender may choose to buy the insurance itself, even if you have 20%+ equity), or
  • Mandatory (if you don’t have at least a 20% down payment, you need a “high-ratio” mortgage and must pay to insure your mortgage).

#2 Factor: The Term

Mortgage rates can vary widely by term. Assuming you don’t accelerate your payments, the term (or contract period) will affect your interest cost more than any other single factor.

You want to choose a term that matches your tolerance for rate risk, first and foremost. You then want to consider your five-year plan. You wouldn’t get a five-year fixed if you only planned to stay in the home for a year, for example.

The lowest mortgage rates usually have prepayment penalties. That can’t be overstressed. You wouldn’t want to choose a five-year term, for example, if you planned to move or refinance in two years.

#3 Factor: The Loan-to-Value

Your mortgage amount, as a percentage of your home value, is called your “loan-to-value,” or “LTV” as they say in the business.

This is a pivotal factor when shopping for mortgage rates. An LTV of 95%, for example, will get you a lower rate than an LTV of 80%, even though you have more equity with an 80% LTV mortgage. The reason is because mortgages with less than 20% equity must generally be default insured at the customer’s expense. That insurance protects the lender from losses and makes lending more economical. Hence, the lender can pass along lower rates to the borrower.

#4 Factor: The Mortgage Amount

The bigger the mortgage, the more profitable the deal and often the better the rate.

Rate Tip: Use our Mortgage Calculator to figure out how much you can afford to borrow.

#5 Factor: The Home Value

Home values under $1 million often fetch better rates. That’s because:

  • there’s less competition for $1 million+ mortgages (since only deposit-taking lenders can fund them)
  • there’s no way to default insure them (since it’s prohibited on seven-figure homes), and
  • there are fewer ways to raise capital for such “super-jumbo” mortgages.

As a result, those loans cost incrementally more.

Rate Tip: Your home value is always confirmed with an appraisal or the lender’s automated valuation tool.

#6 Factor: The Closing Date

Generally, the longer a lender has to guarantee your rate, the more they charge.

If you close your mortgage in 30 days, for example, you’ll often find lower rates than if you close in 130 days. (130 days is typically the longest rate hold you can get from a national lender. 90-120 days is more common. “Quick close” specials are often limited to 30-day closes.)

#7 Factor: The Amortization

The best mortgage rates are often for amortizations of 25 years or less. Lenders often add surcharges if you want a longer payback period, such as a 30-year amortization.

Many mortgage finance companies also have amortization minimums, like 15, 18 or 20 years. If you don’t meet their minimum, you can’t get their rates (unless you refinance, which may entail extra costs).

#8 Factor: Your Property Type

You’ll generally get better mortgage rates if you live in the property being financed. Non-owner-occupied properties, for example, tend to have higher rates due to the added risk to the lender. That’s especially true if they’re rented out.

As well, properties that are less liquid (like cottages) rarely qualify for the lowest rates due to potential resale risk if a customer defaults.

#9 Factor: Your Province

Where you live can have a major impact on your mortgage rate. The best mortgage rates in Toronto, for example, are usually lower than the best mortgage rates in Halifax.

That’s largely a function of the greater competition in a big market like Toronto. There are simply many more lenders serving that market and far more mortgage brokers, all vying for commissions on your business.

#10 Factor: Your Qualifications

Naturally, the lowest rates are available only to qualified borrowers. If your credit isn’t so hot or you can’t prove enough income, you’ll need to deal with a non-prime lender.

Keep in mind, the mortgage rates you see here apply to borrowers with average to above-average qualifications only. Non-prime mortgage rates are quoted on a case-by-case basis and generally require that you use a mortgage broker.

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.

How some lenders can offer lower mortgage rates than others

It’s always easier to find the lowest mortgage rates than to find the lowest borrowing cost. That’s because lenders like to add “gotchyas” to their mortgage agreements. These are surprises that boost your cost of borrowing later. Here are four examples of such pitfalls:

  1. High Penalties: Lenders sometimes offer cheap rates but build in big prepayment charges if you break their mortgage early. These “penalties,” as they’re colloquially known, can sometimes cost you three to four times the interest you save at a lower rate. Major banks are known for having some of the worst fixed-rate mortgage penalties in Canada. Therefore, caveat emptor when it comes to the best bank mortgage rates.
  2. Poor Portability: If you move to a new home, porting your mortgage can save you thousands in penalties. But some deep-discount lenders restrict porting, thus increasing the chances you’ll pay a big penalty when you move. Rate Tip: If you might move before the term is up, look for a lender that allows you at least 60 days to port and gives you fair transparent rates on any new money you might need to borrow.
  3. Restrictive Refinance Policies: Borrowers often need more money before their mortgage matures. That’s especially true for people taking five-year mortgages or longer. Lenders with cheap rates often limit your ability to refinance. Or, they charge higher rates on new borrowing. Sometimes both!
  4. Fewer Prepayment Options: Lenders sometimes strip out prepayment options in their “low-frills” mortgages. That restricts you from making extra payments to lower your interest costs. Rate Tip: Don’t get too hung up on prepayment options. Most people don’t use them, and you can always prepay as much as you want at maturity.

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.

Frequently asked questions about the best Canadian mortgage rates

These are some of the most-asked mortgage questions in Canada, as well as advice on finding the cheapest mortgage rates in Canada.

What are the current best mortgage rates in Canada?

This page contains some of the best mortgage rates in Canada. Search by mortgage type, amount and home value and the lowest rates that we track will appear for you instantly.

Are the lowest mortgage rates usually online?

For the last few years, the best rates in Canada have usually been found online. That’s because internet-based lenders have been more competitive and often accept smaller profit margins. Even big banks are now joining the bandwagon with special pricing for online mortgage shoppers. RATESDOTCA tracks dozens of lenders and aggregates the best deals all in one place.

What is your prediction for Canadian mortgage rates in 2022?

Since March 2020, the Bank of Canada’s policy interest rate has remained at an ultra-low 0.25%. In December 2021, the Bank of Canada announced it would continue to hold steady its overnight lending rate, which is used as a benchmark by lenders. With inflation running high due to supply chain constraints and gasoline prices, the central bank signalled it will not raise its policy interest rate until inflation cools down toward the bank’s 2% target, which it predicts will happen in mid-2022. 

When the Bank of Canada does raise its overnight lending rate, variable mortgage rates will go up. Fixed mortgage rates are influenced by Government of Canada bond yields, which started rising steadily in September 2021. As a result, fixed mortgage rates have already started to increase. Keep in mind that predictions are based on the information at hand and are subject to change. 

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.

Canadian Mortgage Calculators

Want to know how much a mortgage will set you back each month, or how big of a mortgage you'd qualify for, or whether refinancing make sense? Our Canadian mortgage calculators have these answers and then some. When it comes to home financing it's easy to take on more debt than you planned. So crunch the numbers, keep your monthly expenditures at a comfortable level and stay on budget.

Canadian mortgage performance

Below are recent national mortgage arrears statistics for federally regulated lenders, as tracked by the Canadian Banker’s Association.

Canadian mortgage performance

Date
(Year-end)
# of Mortgages # in Arrears % in Arrears
2009 3,995,778 18,059 0.45%
2010 4,189,355 18,177 0.43%
2011 4,312,568 16,556 0.38%
2012 4,393,449 14,374 0.33%
2013 4,605,980 14,522 0.32%
2014 4,654,560 13,269 0.29%
2015 4,692,243 12,753 0.27%
2016 4,705,713 12,991 0.28%
2017 4,775,837 11,414 0.24%
2018 4,759,203 11,657 0.24%
2019 4,809,431 11,438 0.24%
2020 4,915,073 11,258 0.23%
2021 (to July 31st) 4,975,818 9,157 0.18%

*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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