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Find The Best 5-Year Fixed Mortgage Rates In Canada

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Nerdy Insight: Five-year fixed mortgage rates have held relatively steady in May. As of May 16, 2024, some lenders were still offering discounted five-year fixed rates for around 4.8%.

Showing 7 of 20 results

Term

Lender

Rate

Monthly Payment

 

5 Year Fixed Rate


Desjardins

4.69%

$2,538.38

5 Year Fixed Rate


B2B Bank

4.89%

$2,589.12

5 Year Fixed Rate


First National Financial

4.89%

$2,589.12

5 Year Fixed Rate


Meridian

4.89%

$2,589.12

5 Year Fixed Rate


Marathon Mortgage

4.94%

$2,601.87

5 Year Fixed Rate


MCAN Home – Precision Prime for Insured

4.94%

$2,601.87

5 Year Fixed Rate


Scotiabank

4.94%

$2,601.87

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.
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Fixed mortgage rates from Canada’s Big 6 banks

Rates updated: May 23, 2024

Bank

5-Yr Fixed Rate

3-Yr Fixed Rate

1-Yr Fixed Rate

7.04% 7.20% 8.09%
6.84% 6.99% 7.44%
6.84% 6.99% 7.84%
6.79% 6.95% 7.84%
6.79% 6.94% 7.84%
6.84% 6.99% 7.84%

Posted rates for closed mortgages with amortization under 25 years. Data source: Canada's major banks

If you’d like to view more of the products and mortgage rates each of the Big Six are offering, look no further:

Canadian fixed mortgage rate update: May 2024

As of May 16, 2024, three- and five-year government bond yields were trending downward, but not to the extent that lenders will feel pressured to lower their fixed mortgage rates. Lenders generally don’t hesitate to increase their fixed rates when bond yields rise, but they can be a little slower to follow suit when yields are dropping.

Borrowers should still be able to find both three- and five-year fixed mortgage rates below 5%. The spread between the two has decreased — three-year terms were much more expensive in 2023 — so the cost of choosing a three-year term as a means of accessing lower rates sooner is no longer as prohibitive.

Fixed mortgage rates: A 12-month snapshot

Average fixed mortgage rates from Canada’s chartered banks

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. Prime rate is included as a reference point; it doesn’t typically impact fixed mortgage rates.

TERMCONVENTIONAL MORTGAGE RATES
1-year fixed7.84%
3-year fixed6.99%
5-year fixed6.84%
Prime rate7.20%

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

Other calculators to inform your next mortgage decision

Mortgage payment calculator ↗

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Mortgage closing costs calculator ↗

Create a home buying budget by estimating your closing costs.

Our guide to 5-year fixed mortgage rates in Canada

5-year fixed mortgage rates: Facts and data

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

Fixed mortgage rates are typically higher than variable rates, which fluctuate along with a lender’s prime rate. A fixed-rate mortgage 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 fixed rates on five-year 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:

How are Canadian 5-year fixed mortgage rates determined?

Two things factor into your five-year fixed mortgage rate: the government bond market and your finances. 

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, theybanks 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:

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-rate mortgages

Pros

Cons

How to choose the best 5-year fixed mortgage rate

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.

Fees

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. They 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:

Portability

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.

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Alternatives to five-year fixed-rate 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 variable mortgage rates spike 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.

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.

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 rose substantially during the second quarter of 2023, and should continue stretching home buying budgets for the rest of the year. Looking back over the past decade, mortgage rates in 2023 are actually quite high.

Year1-year mortgage rate3-year mortgage rate5-year mortgage rate
20224.464.905.65
20212.803.494.79
20203.253.794.95
20193.644.175.27
20183.474.235.27
20173.163.484.77
20163.143.394.66
20152.973.424.67
20143.143.704.89
20133.083.745.23

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.

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 best 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.

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

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. If you want to compare current mortgage rates from the top lenders and brokers within Canada, you can consider:

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 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 the set percentage a lender charges you to borrow money. APR includes the interest rate, fees and other closing costs 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.

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.

In some cases, lenders will make up for low mortgage rates by charging higher fees, so it’s important to understand any additional charges you might have to pay. Other factors worth comparing when looking at mortgage products include the terms and conditions of your mortgage contract, including prepayment privileges, as well as online access and customer service.

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

Is it a good idea to get a five-year fixed-rate mortgage in 2024?

Fixed mortgage rates are expected to decline somewhat in 2024, so locking in for five years could mean paying more interest than necesary for at least part of your mortgage term. That’s not the worst scenario imaginable, especially when one- and three-year fixed rates are more expensive and harder to qualify for.

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

Some Canadian lenders were offering five-year fixed mortgage rates below 5% as of January 2024.

Article Sources

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

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