Best Variable Mortgage Rates in Canada
Compare the best variable mortgage rates offered by Canada's top bank and non-bank lenders.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.
Variable mortgage rates at Canada’s Big 6 banks
4.55% | 4.58% | ||
|---|---|---|---|
4.65% | 5.40% | ||
4.45% | 4.89% |
Not every Big Six bank works directly with mortgage brokers, so if you're comparing mortgage rates on your own, it can be helpful to consult both brokerage rates — like the ones in the table above — and those offered by Canada's major banks.
Click on a bank's name to see a full list of its current posted and discounted mortgage rates.
Is it a good idea to choose a variable mortgage rate right now?
There are a few reasons why variable mortgage rates are fairly attractive in 2025, including:
They're expected to fall another 50-75 basis points this year, far more than fixed rates are projected to decline.
They charge lower pre-payment penalties than fixed rates, so if you have to move or sell ahead of schedule it's less expensive.
If variable rates start rising in 2026 or 2027, you have the option of switching to a fixed rate.
One knock against variable rates is that they're currently higher than three- and five-year fixed rates. Qualifying for a variable might be more challenging, and until variable rates drop another 50 basis points, they'll generally result in higher mortgage payments.
Pros and cons of variable mortgage rates
Pros
- Historically, variable rates have saved borrowers more money compared to fixed mortgage rates.
- Variable–rate mortgages charge lower penalties if you have to break your mortgage to sell or move.
- If variable mortgage rates rise, you may be able to switch to a fixed interest rate for the rest of the term.
Cons
- If variable mortgage rates spike, your mortgage could become unaffordable.
- Breaking a variable-rate mortgage will still result in pre-payment penalties.
- You may not be able to port your mortgage without converting to a fixed rate first.
Things to consider when choosing a variable mortgage rate
Mortgage type. Variable-rate mortgages come in two types: fixed payment and variable payment. Variable payment tends to be riskier because the actual size of your mortgage payment will change when your rate rises or falls.
Term length. Variable-rate mortgages generally come in three- and five-year terms. Three-year terms often have higher mortgage rates.
Payment frequency. The more frequent your payments — bi-weekly instead of monthly, for example — the faster you can pay off your mortgage.
Broker or bank? A mortgage broker can compare a larger number of mortgage offers for you, which might help you find the best variable mortgage rate. It doesn’t hurt to talk to a broker and a bank or two when comparing mortgage rates.
5 ways to get the best variable mortgage rate
1. Boost your credit score. The best mortgage rates generally go to creditworthy borrowers, meaning those with a solid credit score of 680 and higher. Regularly paying your bills and credit card balances in full is one way to keep your credit score in good standing.
2. Pay down existing debt. The less debt you have, the less risk you pose to lenders, who will have more leeway to offer you a lower rate.
3. Increase your down payment. Proving you can save money and prioritize homeownership might signal to lenders that you’re worthy of a lower interest rate.
4. Shop around. Get rate quotes from banks and mortgage brokers to ensure you’re exploring all of your options.
5. Negotiate. You should always try to negotiate a lower rate than what your lender initially offers. Since variable mortgage rates are based on a lender’s prime rate, there might not be as much room to negotiate as there is with fixed rates.
If the uncertainty of a variable-rate mortgage isn't for you, you'll want to take a look at today's best three-year fixed mortgage rates and five-year fixed mortgage rates.
Variable mortgage rate news: April 2025
On April 16, 2025, the Bank of Canada announced that it would be holding its overnight rate at 2.75%. It was the Bank’s first rate hold after a series of seven consecutive cuts dating back to June 2024.
The Bank’s reasons for holding the overnight rate were the economic uncertainty caused by the U.S. tariff war and the risk of increasing inflation by lowering borrowing costs. (The overnight rate directly influences lenders’ prime rates.)
This isn’t spectacular news for home buyers, as variable mortgage rates will stay at their current levels until at least June 4, when the Bank makes its next rate decision. The lowest variable rates available are currently around 4%.
While variable rates may not improve in the next six weeks, home buyers have a few things working in their favour. Housing stock is piling up, which should take some pressure off of home prices, and Donald Trump’s tariff war may not be the extinction-level event many had feared.
If you have job security, it’s actually not a bad time to be looking for a home.
2025 variable mortgage rate forecast
The Bank of Canada reduced its overnight rate five times in 2024, and has cut twice more in 2025 so far.
With so much uncertainty facing the Canadian economy, primarily the tariff threat from the U.S. and a new federal government, the Bank of Canada is expected to lower the overnight rate another two or three times this year.
Each time the bank cuts, variable mortgage rates will shrink by the same amount. Three 25-basis point cuts, for example, would reduce variable mortgage rates by 0.75%.
- Making your own variable mortgage rate forecast
If you want to carry out a little DIY mortgage rate forecasting, keep an eye on Canada’s inflation rate.
If inflation is trending upward, you can generally expect the Bank of Canada to respond by raising its overnight rate. When that happens, variable mortgage rates also increase. If inflation is declining, the Bank may choose to lower the overnight rate, which will result in lower variable rates.
The economy can be a tricky thing to read, and forecasts are frequently wrong, so never assume you know exactly where rates are heading.
Read more about the Bank of Canada's latest rate announcement.
The BoC makes policy interest rate announcements eight times a year. Here's what you need to know.
What determines variable mortgage rates?
Prime rate. When a lender’s prime rate rises or falls, its variable mortgage rates move in the same direction and by the same amount.
The Bank of Canada. When the Bank’s overnight lending rate increases or decreases, prime rates follow suit, affecting variable mortgage rates.
Inflation. The Bank of Canada raises the overnight rate when inflation’s high, and lowers it if the economy needs a boost. That’s why variable rates are high during times of inflation.
Your financial situation. The variable mortgage rate you’re offered will be customized according to your debt service ratios, credit score and overall financial health.
Frequently asked questions
When will variable rates decrease?
When will variable rates decrease?
Variable mortgage rates started decreasing in June 2024, shrinking each time the Bank of Canada reduced its overnight rate. After seven consecutive cuts to the overnight rate, the Bank held it at 2.75% on April 16, 2025.
What's a good variable mortgage rate today?
What's a good variable mortgage rate today?
Variable mortgage rates dropped into the same range as fixed rates after the Bank of Canada’s seventh overnight rate cut in March 2025 — around 4% in some cases. Getting a variable rate below 4.25% will probably require reaching out to a broker to find you a better deal than what Canada’s biggest banks are offering.
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Clay Jarvis
Clay Jarvis