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Published May 8, 2023

Best 5-Year Fixed Mortgage Rates In Canada

Find the mortgage rate and loan type that best fit your needs.

Nerdy Insight: Fixed rates trended lower in April, but they haven’t shown much downward movement in May. Canada’s Big 6 Banks, for example, haven’t touched their posted fixed rates in weeks. With fixed-rate mortgages currently far more in demand than variable-rate home loans, lenders may not need to drop their fixed rates to grease the wheels for the spring housing market, which is already shaping up to be busy.

Best mortgage rates from Canada’s Big 6 banks

Rates updated: May 26, 2023

Lender3-year fixed rate5-year fixed rate5-year variable rate (closed)5-year variable rate (open)Prime rate
TD Bank5.79%6.34%6.47%7.87%6.85%
National Bank of Canada6.19%6.53%6.74%N/A6.70%

Posted rates for closed mortgages with amortization under 25 years. Data source: Canada’s big six banks

Posted mortgage rates from Canada’s chartered banks

Rates updated: May 26, 2023

The following rates apply to conventional mortgages, or those based on down payments of 20% or more. These rates do not include the discounted rates you may see elsewhere on this page.

1-year fixed6.29%
3-year fixed6.14%
5-year fixed6.49%
Prime rate6.70%

Based on average weekly conventional mortgage interest rates posted by the major chartered banks. Data source: Bank of Canada

Canadian mortgage rate update: May 2023

The future is looking a little brighter for Canadian mortgage shoppers as we move further into spring. 

Variable rates remain high, but they may have peaked. In April, the Bank of Canada held its overnight rate at 4.5% in the second consecutive rate decision that left the overnight rate untouched. That means no further upward pressure on variable rates for the time being. The next Bank of Canada rate decision will be on June 7.

But inflation remains too high for the Bank to begin reducing the overnight rate any time soon. In its most recent statement, the Bank of Canada said it expects inflation to be near 3% later in 2023. That’s still higher than the 2% inflation rate it’s targeting, but inflation of 3% by mid- to late-2023 could open the door for a slight decrease in the overnight rate.

On the fixed-rate side of the equation, two-, three- and five-year bond yields remain significantly lower than they were in March, but their corresponding fixed mortgage rates haven’t declined to the same extent. Fixed rates softened a little in April, as lenders lowered their offerings in preparation for the spring housing market, but now that the market has rebounded, fixed rates may stay where they are. A recession, however, could drive them down somewhat.

3 steps to finding the best 5-year fixed-rate mortgage

Finding the right mortgage is not just about finding the lowest rate. The right mortgage for you should combine a low rate with the features that fit your lifestyle, finances and home ownership goals. Look for the mortgage lender or broker that can offer you a low interest rate combined with flexible terms, minimal fees and low or no prepayment penalties.

STEP 1: Decide what kind of mortgage you're looking for

Enter the mortgage type, purchase price, down payment amount and rate type that fit your budget and personal preferences. Enter the province where your home will be located.

STEP 2: Compare rates

Now it's time to see the effect different rates can have on the cost of your home loan. Enter the rate and your loan preferences into a mortgage payment calculator. You can also click “Explore Quote", answer a few questions and see customized mortgage options from highly-rated lenders. No sign-up is required.

STEP 3: Contact a lender

The information you'll find here, and on any rate comparison page, is really just the first step in the mortgage process. You'll need to reach out to a mortgage lender or mortgage broker and share your financial details to really know what your mortgage options are. Remember: Never be afraid to negotiate!

Our guide to 5-year fixed-rate mortgages in Canada

5-year fixed-rate mortgages: Facts and data

When you agree to a five-year fixed-rate mortgage, your mortgage payments for the next half-decade are set. Even if interest rates rise or fall during your five-year term, your rate and your monthly mortgage costs will remain the same. 

Fixed mortgage rates are typically higher than variable rates, which means fixed-rate mortgages could cost you more in interest, But the predictability of knowing how much your mortgage payments will be for several years can be worth the added expense.

Fixed-rate mortgages are the most commonly chosen mortgage type in Canada, both because they’re stable and because Canada’s major banks tend to offer some of their best rates on five-year fixed terms. There was a period during the COVID-19 pandemic when low variable rates caused their popularity to spike, but once variables began their rapid rise in March of 2022, home buyers gravitated back to the certainty offered by fixed rates:

Is a 5-year fixed-rate mortgage right for you? 

Despite their popularity, five-year fixed-rate mortgages aren’t necessarily a fit for every homebuyer. When deciding if a fixed-rate mortgage of any length is right for you, be sure to consider the following:

Pros and cons of 5-year fixed mortgage rates



Alternatives to five-year fixed mortgages

If you aren’t comfortable with the risks associated with a five-year fixed-rate mortgage, there are other options to consider.

Choose a variable rate

Depending on where rates are sitting when you sign your mortgage, a variable-rate home loan might offer a lower interest rate. And if it doesn’t, there are generally fewer penalties involved if you break your mortgage or refinance during your mortgage term. 

If your variable rate spikes during your term and you become worried that you won’t be able to make your mortgage payments, most lenders will allow you to switch to a fixed rate for the remainder of your term.

Choose a shorter term

If planning five years in the future doesn’t feel realistic, shorter term fixed-rate options are available. Shorter-term mortgages typically have lower rates, but if demand for these products is high, like it was in early 2023, they may creep higher than the rates attached to loans with five-year terms.  

Opting for a shorter-term fixed-rate mortgage means you’ll have to renew your mortgage sooner. If mortgage rates rise during your term, you’ll be facing higher mortgage costs than if you had locked in for the full five years. Of course, the opposite is true, too. If rates fall during your term, you could renew at a lower rate that might not be there a few years from now.

How are 5-year fixed mortgage rates determined?

Two things factor into your five-year fixed mortgage rate: the government bond market and your own unique financial situation. 

The bond market

Government bonds are considered very stable investments, which is why financial institutions invest in them to create a reliable profit flow. When interest rates rise, however, bond values decrease and therefore the banks lose money. To offset this loss, banks will then raise the interest rates on fixed-rate mortgages.

A simple way of thinking about it is that when the yield (the actual rate of return during a bond’s term) on five-year government bonds trends up or down, five-year fixed mortgage rates eventually follow suit. The same goes for two- and three-year bonds and fixed mortgage rates that correlate with those terms. 

Your financial situation

While the bond market influences how lenders price their fixed mortgage products, the actual rate you’ll be offered depends on your overall financial situation, including:

Forecasting 5-year fixed mortgage rates

Because they’re influenced by the bond market, which is influenced by investor sentiment, Canada’s five-year fixed mortgage rates can be hard to predict with any accuracy, especially over the long-term. 

Even short-term fixed-rate predictions can be tricky. If you notice a sustained upward or downward trend in the five-year government bond yield, history tells us that five-year fixed mortgage rates tend to move in the same direction. But when they’ll move, how much they’ll fluctuate, and how long they’ll stay at their new levels is hard to pinpoint, since each lender determines its own rates.

What’s a good 5-year fixed mortgage rate?

The short answer: A good 5-year fixed mortgage rate is the lowest rate you can qualify for based on the amount you need to borrow and the specific loan features that best fit your finances.

The longer answer to this question requires some historical context. According to the Bank of Canada, the average 5-year mortgage rate posted by Canada’s major chartered banks was:

Fixed mortgage rates have remained elevated for the first quarter of 2023, and continue to stretch home buying budgets. But looking back over the past few decades, mortgage rates are still relatively low by historical standards.

Year1-year mortgage rate3-year mortgage rate5-year mortgage rate

Why it’s important to compare 5-year fixed mortgage rates before applying

A mortgage is the biggest loan most Canadians will ever take out in their lives. Keeping monthly mortgage payments manageable is key to living comfortably with such a large debt. The rate of interest charged to finance a home purchase, also called the mortgage rate, has a huge impact on the total cost of your loan.

Getting the lowest rate possible can significantly lower the overall cost of your mortgage. Here’s an example that illustrates just how much you can save by shaving 0.3% off of a five-year fixed mortgage rate. For the home purchase, we’ll use the following figures:

If your rate was 5.5%, you would pay $503,656 in total interest over the course of your mortgage. If your rate was 5.2%, you’d pay $471,479 — a difference of $32,177.

Use APR for more accurate 5-year fixed mortgage rate comparisons

When comparing mortgage rates, it’s crucial to compare annual percentage rates (APRs) and not just the advertised interest rates. The interest rate is a set percentage that a lender charges you to borrow money; APR includes the interest rate, fees and other closing costs that are set by the lender.

Ideally, lenders will publish APRs in addition to interest rates. If they don’t, APR can be calculated this way:

Looking at the APR will give you a more accurate idea of the true cost of your mortgage. Here’s an example:

If you only compared the above mortgage offers based on interest rate, you’d find no difference. But by examining APR, you can see that Lender B is charging lower fees, meaning the second mortgage offer is the better deal.

How to choose the best 5-year fixed-rate mortgage for you

When choosing a mortgage, the interest rate is just one factor. There are other aspects you need to consider before deciding on the final make-up of your mortgage. Some are general and apply to all home loans, others are more specific to fixed-rate mortgages.

Amortization length

Amortization refers to the total amount of time it will take you to pay off your mortgage in full. In Canada, the longest amortization you can secure with a down payment of less than 20% is 25 years. With a down payment greater than 20%, you can secure an amortization of up to 35 years.

Some borrowers opt for the shortest amortization period possible, because it means paying less interest overall and potentially saving thousands of dollars. But that does mean higher monthly payments.


Some fees, like home appraisal costs, will be par for the course no matter which lender you apply for your mortgage with. But some, like alternative lenders and private lenders, may charge a host of other fees that could increase the cost of your mortgage significantly.

It’s critical that you have a discussion with your lender or mortgage broker about all the fees and additional costs associated with a particular home loan early in the mortgage application process. Doing so will give you more information to work with when comparing different mortgages.

Prepayment penalties

Prepayment penalties are fees that may be incurred if you pay off all or part of your mortgage before the end of its term. Prepayment penalties are an important consideration when deciding if a fixed-rate is the best option because they could end up costing you tens of thousands of dollars if you have to sell your home before the term expires.

How prepayment penalties are calculated depends on your specific lender and mortgage contract. For fixed-rate mortgages, the penalty charge is usually the higher of:


Porting a mortgage occurs when a lender allows a homeowner to transfer the mortgage she had on a home she just sold to a newly purchased one. This allows the borrower to break a mortgage mid-term without having to pay a high prepayment penalty.

When you port a mortgage, you generally get to keep your current interest rate if your new mortgage is smaller than your original one. If your new mortgage is larger, you’ll likely be offered a blended mortgage, where your previous mortgage rate is combined with your lender’s current market rate.

You can only port a mortgage with the lender you originally signed your mortgage contract with. 

Open vs. closed mortgages

Five-year fixed-rate mortgages in Canada are typically considered closed mortgages. With a closed mortgage, your contract terms are set for the duration of your mortgage term. Making changes to your payment schedule could mean breaking your mortgage contract and paying penalties.

Open mortgages allow borrowers a little more flexibility in how they pay back their loans. With an open mortgage, you can increase your payment frequency and make lump-sum payments without being charged any prepayment penalties. The interest rates on open mortgages tend to be higher than those attached to closed mortgages.

What happens at the end of your 5-year mortgage term?

As the five year mark approaches, you’ll have several options: renew, refinance or replace.

If you elect to renew your mortgage, your lender will send you a renewal statement that contains details of your renewed contract, such as the term and interest rate. If all looks good, you simply sign the document and your mortgage will continue on seamlessly.

But if you’re not entirely happy with the new mortgage contract — maybe you want a lower interest rate or a shorter amortization period — you could try to refinance your agreement to get more favourable terms.

You also have the option of comparing current mortgage rates and going with a new lender. While you might get a better rate with a new lender, keep in mind that there may be additional costs, such as setup and appraisal fees.

How to qualify for the lowest 5-year fixed mortgage rate

Though lenders may have different mortgage qualification criteria, there are other reliable ways to qualify for the lowest mortgage rate.

Improve your credit score 

The best mortgage rates generally go to creditworthy borrowers, meaning those with a solid credit score of 680 and higher. Lenders perceive borrowers with high credit scores as lower risk. 

You’re still likely to be considered for a mortgage with a score of 600 and above, you just may not necessarily be offered the best rates.

Maintain low debt service ratios

Lenders will take a careful look at two debt service ratios when deciding whether or not to give someone a mortgage with the best rates: Gross Debt Service (GDS) and Total Debt Service (TDS) ratios.

Your GDS ratio is what percent of your pre-tax household income goes towards housing costs like your mortgage payments, utilities and property taxes. It should not exceed 39% of your yearly gross income.

Your TDS ratio includes your GDS, as well as any other debts you are carrying (like student loans and credit card debt). Your TDS ratio should not be more than 44% of your pre-tax household income. The lower your ratios are, the better chance you have of getting the most favourable mortgage rates.

Increase your down payment

Saving a larger down payment isn’t always easy, but making a bigger initial payment can work wonders for your mortgage.

You’ll borrow less, which will decrease your overall mortgage costs. And by proving you can save money and prioritize homeownership, lenders may see you as less risky and worthy of a lower interest rate.
Making a significant down payment of 20% or more will free you from having to buy mortgage default insurance, too, an ongoing cost that gets added to your monthly mortgage payments.

Is the lowest mortgage rate the best mortgage rate?

It may seem counterintuitive, but the “best” mortgage isn’t necessarily the one that offers the lowest annual percentage rate — though that’s a good place to start.

Other factors worth comparing when looking at mortgage products include fees, the terms and conditions of your mortgage contract, but also online access and customer service. You can compare mortgage rates for different terms from top Canadian lenders and brokers to decide what’s the best mortgage rate for your needs. In some cases, lenders will make up for low mortgage rates by charging higher fees, so it’s important to evaluate all of these factors.

Frequently asked questions about 5-year fixed mortgage rates in Canada

What are the major risks of a 5-year fixed-rate mortgage?

Five-year fixed-rate mortgages tend to be hard to break, so if you have to sell your home before the end of your mortgage term, you may pay a severe financial penalty. And if mortgage rates decrease during your term, you won’t benefit; you’ll have to pay the same rate of interest for the duration of your term.

Will 5-year fixed mortgage rates go up?

Predicting fixed mortgage rates is difficult in the short-term and almost impossible in the long-term. If you want to see where five-year fixed mortgage rates might go, take a look at the yield on five-year government bonds. If it’s trending up, expect five-year fixed-rates to increase; if it’s trending down, fixed-rates may eventually follow suit.

Article Sources

Works Cited
  1. Mortgage Professionals Canada, “2022 Year-End Consumer Survey & Outlook,” accessed March 7, 2023.
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