Editor’s Note: The Bank of Canada has lowered its overnight rate to 2.5%, a decrease of 0.25 percentage points. This was the first rate cut in six months. In its announcement, the BoC stated, “After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing.” Read more about the cut and how it could affect home buyers.
5-Year Fixed Mortgage Rates in Canada
Learn all you need to know about 5-year fixed rates — or skip right to the rates currently offered by bank and non-bank lenders.
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Current 5-year fixed mortgage rates in Canada
5-year fixed mortgage rates from Canada's Big 6 banks
Posted rate | Discounted rate | |
|---|---|---|
6.11% | 4.41% (insured) 4.67% (uninsured) | |
6.49% | 4.21% (insured) 4.56% (uninsured) | |
6.13% | 4.43% (insured) 4.63% (uninsured) | |
6.12% | 4.42% (insured) 4.72% (uninsured) | |
6.09% | -- | |
6.09% | 4.761% (insured) 4.761% (uninsured) |
All discounted rates are annual percentage rates (APR), which include additional fees.
5-year fixed mortgage rates from a mortgage broker
What's happening with 5-year fixed mortgage rates: September 2025
Five-year fixed mortgage rates are inching down thanks to downward trends in the government bond market.
Five-year bond yields, which lenders use to set their five-year fixed rates, have been sliding all month, giving lenders ample room to improve their rate offers. A few major banks dropped their rates in the second week of September, and more lenders could follow suit.
As of September 15, Canadian mortgage brokers are offering three-year fixed mortgage rates around 3.9%. Competing rates at Canada’s biggest banks are generally closer to 4.3%.
Next step: Crunch the numbers with our mortgage calculators
5-year fixed mortgage rates: A detailed breakdown
Why it's Canada's favourite mortgage rate
According to the Bank of Canada, about 40% of mortgages in Canada are fixed-rate loans with five-year terms, making them the most common option among the country's mortgage holders.
In the higher-rate, post-COVID era, more home buyers and renewing homeowners have gravitated toward shorter fixed-rate terms than in the past, but the five-year fixed is still the Canadian standard.
Why that is comes down to its strongest selling point: predictability. Because the rate is set for the duration of the term, you'll know exactly what your mortgage payment will be for five years. That stability can make household budgeting and financial planning a lot easier than if you chose a variable rate, which has the potential to increase.
Five-year fixed rates have historically been more expensive than variables and even three-year fixed rates, so Canadians seem willing to pay a premium for several years of predictability.
What about the risks?
Fixed-rate mortgages might be predictable; life, not so much. A lot can happen in five years that could require you to sell your home or refinance your mortgage. Doing either before your mortgage term expires will trigger prepayment penalties.
At the very least, you'll be charged three months' interest. But you might pay much more. It depends on the size of your mortgage and the lender who provided it. Each lender has its own formula for calculating prepayment penalties, and they can knock a gaping hole in your finances.
No matter what mortgage you choose, have your mortgage advisor or mortgage broker walk you through some example scenarios so you can see how much breaking a mortgage might cost you at different points during the term.
If you're reasonably sure you won't stay in your home for the full term, and the prepayment penalties scare you, a five-year fixed might not be for you.
5-year fixed vs. 3-year fixed | 5-year fixed vs. variable | |
|---|---|---|
Cost | Historically, 5-year fixed rates have been the less more expensive option, but not since the pandemic. | Variable rates have historically been lower than fixed rates, though variables have been the more volatile option since COVID. |
Prepayment penalty risk | About the same. The real risk with pre-payment penalties is the size of your mortgage, not the term you choose. | A 5-year fixed will generally be riskier. With variables, the maximum prepayment penalty tops out at three months’ interest |
Switchability | A fixed rate can’t be switched to a variable rate mid-term without breaking the mortgage. | A variable rate can be switched to a fixed rate for the remainder of the term without penalty. |
Exposure to rate fluctuations | None. Your rate won’t change for the length of your term. | Significantly higher with variable rates, which change every time your bank’s prime rate increases or decreases. |
Pros and cons of 5-year fixed-rate mortgages
Pros:
Predictability. You'll know what your mortgage payment will be for the entirety of the term.
Less to think about — for longer. You'll have an easy to understand mortgage that won't have to be renewed for half a decade.
Cons:
No ability to switch. You can't switch rate types if variable rates become attractive.
Pre-payment penalties. Breaking a fixed-rate mortgage of any length can trigger significant penalties.
How 5-year fixed mortgage rates are determined
The bond market
Here’s a simple way of thinking about it: when the yield on five-year government bonds rises or falls for a sustained period, five-year fixed mortgage rates eventually follow suit. You can track five-year bond yields by visiting the Bank of Canada website.
Your financial situation
The bond market influences five-year fixed rates, but the actual rate you’re offered depends on your financial situation, including your credit score, the size of your down payment and how much debt you're carrying.
A lender or brokerage might advertise a five-year fixed rate for 4%, but that doesn’t mean everyone will qualify for it.
How to get a lower 5-year fixed mortgage rate
Improve your credit score 📈 Borrowers with a credit score of 680 or higher tend to get the best mortgage rates. Lower credit scores may mean working with an alternative lender that offers higher rates.
Tackle your debt 🏦 Paying off debt improves your credit score and increases cash flow. Debt payments, including your mortgage, should total less than 44% of your household income.
Boost your down payment 💰 Making a larger down payment and borrowing less reduces a lender's risk. They may reward you with a lower interest rate.
Compare multiple offers ⚖️ Don't limit yourself to one option when looking for a mortgage; get offers from a few lenders. A few minutes of your time could result in thousands in savings.
Negotiate 💪 Always ask lenders if they can improve on their rate offers. If this makes you feel uncomfortable, use a mortgage broker, who will negotiate for you.
Frequently asked questions
Is getting a 5-year fixed mortgage a good idea?
Is getting a 5-year fixed mortgage a good idea?
A five-year fixed-rate mortgage is generally best for someone who prioritizes predictability, and who doesn’t expect their life or livelihood to change for several years. That’s because breaking a five-year fixed-rate mortgage can trigger steep prepayment penalties.
What's a good five-year fixed mortgage rate?
What's a good five-year fixed mortgage rate?
The best five-year fixed mortgage rates are hovering around 4.2% as of Sept. 2025.
Will five-year fixed mortgage rates go down in 2025?
Will five-year fixed mortgage rates go down in 2025?
Five-year fixed rates were expected to decline somewhat in 2025, but the U.S. tariff war has made accurate forecasting difficult. If fixed rates drop this year, it likely won't be by much.
8Twelve has partnered with over 65 Canadian mortgage lenders to provide competitive rates on over 7,000 mortgage products. 8Twelve can quickly match you with a lender and mortgage type that meets your needs — even if your financial situation is unique.
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Clay Jarvis
Clay Jarvis
Clay Jarvis