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Published November 12, 2024

The Best 5-Year Variable Mortgage Rates in Canada

Compare 5-year variable mortgage rates from some of Canada’s best lenders to ensure you’re getting a great deal.
Rates updated:

Showing 7 of 20 results

Term

Lender

Rate

Monthly Payment

 

5 Year Variable Rate


Marathon Mortgage

4.95%

$2,604.43

5 Year Variable Rate


Manulife

5.00%

$2,617.22

5 Year Variable Rate


FirstOntario Credit Union

5.05%

$2,630.05

5 Year Variable Rate


RFA

5.05%

$2,630.05

5 Year Variable Rate


MERIX

5.05%

$2,630.05

5 Year Variable Rate


B2B Bank

5.05%

$2,630.05

5 Year Variable Rate


Radius Financial

5.05%

$2,630.05

Disclaimer: The rates displayed do not include any taxes, fees, insurance, or other additional charges. These rates are estimates and are not guaranteed. The actual rate and loan terms you receive will depend on our partner’s assessment of your creditworthiness, loan amounts, and other relevant factors. Please note that any potential savings figures provided are estimates based on the information you and our advertising partners have provided. Terms and conditions apply.
Mortgage Brokerage licensed in ON #13072, AB #2122265990, BC #X300983, MB #RW-2011175, NL #88786, NB #210042526, NS #2023-3000270, PEI #755902715, QC #606914, SK #508695, YT #839770

Five-year variable rates give borrowers the chance to pay lower rates in the future if interest rates fall, but if rates rise during the five-year mortgage term, their monthly payments could go up.  

Canadian variable mortgage rate update: November 2024

Variable mortgage rates are stable in November, and aren’t likely to shift until the Bank of Canada delivers its next overnight rate decision on December 11, 2024.

The Bank is expected to announce another rate cut, but whether it will be a mild reduction or a jumbo 50-basis point cut like the one rolled out in October remains to be seen.

Whatever the Bank decides, variable mortgage rates are almost sure to decline again in December. A 50-basis-point cut would bring today’s lowest variable mortgage rates down to 4.25%. 

What is a 5-year variable mortgage rate?

If your mortgage rate is variable, the interest rate you may rise or fall over the course of your loan term. Compare this to a fixed-rate mortgage, which remains the same throughout the loan, regardless of whether the lender updates the rates it offers new borrowers.

The factors that lead lenders to change their rates usually involve the larger economic context. For example, if the Bank of Canada raises its overnight rate, you can expect your lender to follow suit. If the BoC lowers its rate, your variable rate will likely fall.

This uncertainty creates a risk for borrowers, which is why you’ll typically find variable mortgage rates to be lower than fixed rates. That difference, of course, isn’t guaranteed to last. During times of high inflation, variable rates can surge past fixed rates. A BoC study showed that median payments for borrowers who opened a variable-rate mortgage in February 2022 had risen 70% by November 2023.

What’s the best variable mortgage rate?

Short answer: The “best” variable mortgage rate is the lowest rate you can qualify for on the specific loan product that best fits your finances. The best rate available to one person depends largely on their financial profile, which includes credit score, income and other debts. As a result, there’s no way to determine a “best” or “average” rate that applies to everyone.

Historical variable rate trends

While it’s tempting to compare today’s rates to rates of the past, it’s a fruitless exercise. Just look at the following Statistics Canada data from the past 10 years, which tracks the average variable mortgage rate on insured mortgages in August of each year. The variable mortgage rates available in August 2019 probably seemed really high compared to rates available in the preceding years. But today, those same 2019 rates look pretty sweet. It’s just a matter of perspective. 

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Will variable mortgage rates come down in 2024?

Variable mortgage rates started decreasing in June 2024, after the Bank of Canada reduced its overnight rate for the first time in four years. Variable rates will decline with every Bank of Canada rate cut.

Predicting variable mortgage rates

Keep an eye on Canada’s inflation rate if you’re trying to anticipate where variable mortgage rates are headed.

If inflation is going up, the Bank of Canada is more likely to raise its overnight rate. When that happens, variable mortgage rates also increase. If inflation is falling, the Bank may lower this rate, which means lower variable rates.

Even professional forecasts are frequently wrong, so never assume you know exactly where rates are heading.

Pros and cons of variable mortgage rates

Pros:

Cons:

How to choose between fixed and variable rates

When you compare fixed- and variable-rate offers, don’t stop at comparing what payments would look like today. Work with your lender or use a mortgage calculator to see what the benefit of falling rates would look like — and what it would look like if rising rates were to make your monthly payment go up.    

Who variable rates are best for

Choosing a variable-rate mortgage comes with a risk — that your payments will rise. Because variable rates tend to be lower than fixed rates, you’d benefit if rates stay the same or fall during your mortgage term. The more confident you are that this will happen, the more you may consider a variable rate. In addition, a person who chooses a variable rate should be in a financial position to pay a larger amount if rates end up rising. If your initial mortgage payment is already stretching your housing budget, a variable-rate mortgage may be too risky, even if you are confident that rates will fall.

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