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Rates are based on an average mortgage of $300,000
| Insured | 80% LTV | 65% LTV | Uninsured | Editor's Tips GREAT RATE |
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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.
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.
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.
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.
If you decide on purchasing a home with less than 20% of the down payment saved, you will need CMHC insurance.
Getting the best mortgage rates requires five main things:
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.
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.
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.
| Year | Conventional Mortgage - 5 Year | Conventional Mortgage - 3 Year | Conventional Mortgage - 1 Year | Prime Rate |
|---|---|---|---|---|
| 07/27/2022 | 6.14% | 5.64% | 5.19% | 4.70% |
| 07/20/2022 | 6.04% | 5.39% | 4.74% | 4.70% |
| 06/22/2022 | 6.04% | 5.24% | 4.69% | 3.70% |
| 06/15/2022 | 5.64% | 4.89% | 4.29% | 3.70% |
| 06/08/2022 | 5.39% | 4.49% | 3.79% | 3.70% |
| 05/25/2022 | 5.39% | 4.49% | 3.79% | 3.20% |
| 04/20/2022 | 4.99% | 3.89% | 3.09% | 3.20% |
| 03/23/2022 | 4.79% | 3.49% | 2.94% | 2.70% |
| 03/09/2022 | 4.79% | 3.49% | 2.79% | 2.70% |
| 01/05/2022 | 4.79% | 3.49% | 2.79% | 2.45% |
| 2021 | 4.79% | 3.49% | 3.09% | 2.45% |
| 2020 | 5.19% | 3.94% | 3.64% | 3.95% |
| 2019 | 5.34% | 4.29% | 3.64% | 3.95% |
| 2018 | 4.99% | 3.74% | 3.24% | 3.2% |
| 2017 | 4.64% | 3.39% | 3.14% | 2.7% |
| 2016 | 4.64% | 3.39% | 3.14% | 2.7% |
| 2015 | 4.79% | 3.44% | 3.14% | 3% |
| 2014 | 5.34% | 3.95% | 3.14% | 3% |
| 2013 | 5.24% | 3.7% | 3% | 3% |
| 2012 | 5.29% | 4.05% | 3.5% | 3% |
| 2011 | 5.19% | 4.15% | 3.35% | 3% |
| 2010 | 5.49% | 4.25% | 3.6% | 2.25% |
| 2009 | 6.75% | 6.25% | 5.6% | 3.5% |
| 2008 | 7.55% | 7.54% | 7.35% | 6% |
| 2007 | 6.45% | 6.4% | 6.3% | 6% |
| 2006 | 6.3% | 6% | 5.8% | 5% |
| 2005 | 6.05% | 5.6% | 4.8% | 4.25% |
| 2004 | 6.35% | 5.8% | 4.75% | 4.5% |
| 2003 | 6.7% | 6% | 4.9% | 4.5% |
| 2002 | 6.85% | 5.75% | 4.6% | 4% |
| 2001 | 7.95% | 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
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.
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.
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.
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.
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.
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.
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.
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
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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