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Published April 22, 2022

Compare the Best Mortgage Rates in Canada

Compare customized mortgage rates from Canada’s top lenders and brokers in minutes. Easily select the best mortgage rate for your needs.

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Guide to Comparing Mortgage Rates in Canada

The mortgage rates displayed on this page are provided to NerdWallet by Homewise, a licensed mortgage broker that partners with lenders across Canada.

These mortgage rates are refreshed daily, representing the latest mortgage options available from Homewise’s lender partners. The rates come directly from Homewise’s lender partners and are updated by Homewise to provide the most accurate options for you each day.

» MORE: How mortgages work in Canada

What’s a good mortgage rate?

The short answer is: the lowest possible rate for which you can qualify based on the mortgage type you want and the amount you need to borrow.

The longer answer to this question requires some historical context. According to Statistics Canada, the average conventional mortgage lending rate for loans with 5-year terms was 7.18% in 2001, 4.57% in 2011, and 3.28% in 2021.

You can see that while 5% would have been an excellent mortgage rate in 2001, relative to the average, it wouldn’t have been so great in 2021.

Although it’s widely expected that mortgage interest rates will increase throughout 2022, as the Bank of Canada adjusts interest rates to account for inflation, looking back over the past few decades shows that mortgage rates are still quite low by historical standards.

And it’s important to keep in mind that a lender’s advertised rate is only the beginning of the story. The actual mortgage rate you’re offered will be determined by your credit score and other personal financial factors.

Why it’s important to compare 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, e.g the mortgage rate, has a huge impact on the total cost of your loan.

Getting the lowest rate possible will save you money, while paying an unnecessarily high rate will cost you money. That being said, rates shouldn’t be the only determining factor when comparing lenders; penalty costs, portability and overall customer service are also key considerations.

Doing thorough research, understanding your mortgage objectives and comparing options side by side will give you the confidence that you’re getting a competitive rate with a mortgage lender that will meet your needs.

How to compare mortgage rates across lenders

Comparing mortgage rates between lenders can be more complex than it initially appears.

Firstly, it’s crucial to compare annual percentage rates and not just interest rates. While 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, but if they don’t, APR can be calculated by hand:

First, divide total fees by the total loan amount.
Then, multiply the result by the number of days in the year.
Next, divide that result by the total number of days in the loan’s term.
Finally, multiply that result by 100 and add a % sign.

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

  • Lender A: Offers a 5-year fixed mortgage with a 3% interest rate and 3.25% APR.
  • Lender B: Offers a 5-year fixed mortgage with a 3% interest rate and 3.175% APR.

If you compare the above mortgage offers based on interest rate alone, there’s no difference. But by also examining APR, you can see that Lender B is charging lower fees, meaning the second mortgage offer is actually the better deal.

When looking at mortgage rates, take care to compare identical mortgage products, terms and amortization periods. Other important considerations when comparing mortgage rates across lenders include fees (like home appraisal fees), prepayment penalties, portability, the ease of the application process and a lender’s customer service ratings. You may also think about whether you’re comfortable going with an alternative lender or want to stick with a well-known institutional lender.

How are mortgage rates determined?

Mortgage rates are determined by the health of Canada’s economy, especially the rate of inflation, as well as additional considerations that are wholly dependent on each applicant’s unique personal and financial circumstances, such as the type of interest rate you choose, the mortgage term and amortization period you choose, your down payment amount, and your credit score and income.

The Canadian government, Banks and the economy

The two main economic factors affecting mortgage rates are the Bank of Canada’s overnight rate (also known as the benchmark rate) and the bond market.

Bank of Canada’s overnight rate

The Bank of Canada’s benchmark rate is the interest rate financial institutions charge one another to borrow money. The BoC increases or decreases its rate based on market conditions, primarily the country’s rate of inflation. If the economy is booming and inflation is rising too quickly, the BoC will try to curb it by increasing its benchmark rate. Higher interest rates tend to have a calming effect on the economy because people borrow and spend less. If the economy is slowing and inflation is not a concern, the BoC will lower its benchmark rates to encourage economic activity.

When the Bank of Canada increases its overnight rate, it’s more costly for financial institutions to borrow money. To recoup their losses, banks pass on this expense to their customers by raising their prime lending rate. This is of particular concern to variable mortgage rate holders. Variable mortgage rates are tied to a financial institution’s prime rate, so when a bank raises its prime rate, clients with a variable mortgage will experience an increase in their mortgage rate.

Bond market

Bonds are considered to be a very stable investment and financial intuitions invest in government bonds 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. The bond market does not affect the rate of variable mortgages, only fixed.

The type of mortgage interest you choose (fixed vs variable vs hybrid)

There are three main types of mortgage interest to choose from in Canada: fixed-rate, variable-rate and hybrid.

Fixed-rate mortgage

A fixed-rate mortgage locks in your interest rate and payments for the entire length of your mortgage term.

Historically, fixed rate mortgages generally tend to have higher interest rates than variable rate mortgages but they remain popular because they are ideal for those who enjoy the peace of mind of predictable payments.

A potential downside of a fixed rate mortgage is that the penalty to break a fixed rate mortgage contract is more costly than breaking a variable mortgage. Finally, while mortgage holders can usually convert a variable rate mortgage to a fixed mortgage at any time, it’s not possible to go from a fixed to a variable mortgage without breaking your mortgage contract and incurring expensive penalties.

Variable-rate mortgage

With a variable rate mortgage, your interest rate will fluctuate based on changes to your lender’s prime rate.

So, for example, if your rate is prime (prime being 2%) plus .50% then your mortgage rate is 2.50%. If, however, your lender’s prime rate increases to 2.50%, your new rate would be 3%.

Though variable interest rates have historically been lower than fixed rates and could therefore save you money over time, the lack of certainty can be stressful for some mortgage holders. On the plus side, as previously noted, variable rate mortgages have lower penalty charges if you break your contract and it’s always possible to go from a variable to a fixed rate mortgage.

» MORE: How to choose between fixed and variable-rate mortgages

Hybrid-rate mortgage

A much lesser-known interest rate option is the hybrid model, in which a portion of the mortgage amount is subject to a fixed rate of interest and the rest to a variable rate. Note that each portion of a hybrid mortgage may have a different term, which makes this kind of mortgage harder to transfer if you want to move to a different lender at any point in the future.

The mortgage term and amortization you choose

Mortgage term

The term is the length of time your mortgage contract is valid. In Canada, mortgage terms can run anywhere from six months to as long as 10 years. The most popular mortgage term, according to Statistics Canada, is a five-year fixed-rate mortgage, which accounted for 49% of Canadian mortgages in 2020.

The popularity of the 5-year fixed term may be because financial institutions, like many people, enjoy having a predictable payment schedule without feeling that they are locked into a contract for an uncomfortably long period of time.

Amortization period

Don’t confuse your mortgage’s term with its amortization period, which is the length of time it will take you to pay off your mortgage in its entirety. The most common amortization period in Canada is 25 years.

In fact, if your down payment is less than 20% of a home’s value, you’re not allowed to exceed an amortization of 25 years. If you can provide a down payment greater than 20% then you can have an amortization period 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.

Here are some other types of mortgage contract terms to be aware of:

  • Short-term mortgage. Terms of five years or less. With a short-term mortgage you can choose between a variable or fixed rate. In general, the shorter the term, the lower the interest rate, but for many Canadians looking to avoid the vagaries of the economy, financial peace of mind may be worth the extra expense of locking your mortgage in for a longer period of time.
  • Long-term mortgage. Terms of more than five years. Longer term mortgages tend to be fixed rate only and feature substantial prepayment penalties if you break the contract in the first five years.
  • Open mortgage. An open mortgage is the most flexible type of mortgage because it allows prepayment of the loan without any penalty charges, potentially saving you a lot of money on interest. However, you pay for this flexibility with higher interest rates than you get with a closed mortgage. So, if you don’t end up paying off the mortgage early, you would actually lose money.
  • Closed mortgage. In exchange for a lower interest rate, a closed mortgage locks you into a mortgage contract for a set period of years. If you want to pay off the mortgage early, you’re charged a significant prepayment penalty.
  • Mortgage Insurance. If you have a down payment of less than 20% of the value of a property, it’s considered to be a high-ratio mortgage and you’ll need mortgage default insurance. The insurance protects lenders in the case that a borrower defaults on their mortgage. Mortgage default insurance premiums tend to range from 0.60% to 4.50% of your mortgage amount.
What happens at the end of your mortgage term?

When your mortgage term ends, you 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.

If, however, you’re not entirely happy with the new mortgage contract, because, for instance, 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 to compare mortgage rates again and go 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.

Mortgage 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 what kind of mortgage to choose as they could end up costing you tens of thousands of dollars.

How prepayment penalties are calculated depends on your specific lender and mortgage contract. In general, if you have a variable-rate closed mortgage, your prepayment charge will be three months’ interest on the prepayment amount. For fixed-rate mortgages, the penalty charge is usually the higher of:

  • Three months’ interest on the prepayment amount, or
  • The interest rate differential (IRD) on the prepayment amount. The interest rate differential can vary by lender but is often calculated as the difference between your current mortgage rate and the rate currently posted by the financial institution.

Your down payment amount

In Canada, if a home costs $500,000 or less, the minimum down payment is 5% of the purchase price.

For homes valued at over $500,000, the minimum down payment is 5% on the first $500,000 and 10% on the remaining balance. For homes worth $1 million or more, the minimum down payment is 20%.

So, for example, if you wanted to buy a home valued at $850,000, you’d need to pay $25,000 on the first $500,000 (5% of $500,000 = $25,000) and $35,000 on the remainder (10% of $350,000 = $35,000) for a total down payment of $60,000.

The amount of your down payment greatly influences the overall size of the loan you need and the type of mortgage you can get.

If your down payment is less than 20% of the home’s value, you’ll need what’s known as a high-ratio mortgage. As such, you’ll be required to pay for mortgage default insurance, which will add an additional charge of up to 4.5% of your mortgage amount to the cost of buying a home.

A larger down payment also means that you’ll start off with more home equity, which increases your net worth and makes it easier to qualify for home equity lines of credit with favourable rates. Access to a HELOC come in very handy if you need to do renovations.

A larger down payment also means that you won’t need to finance as much of the home’s price, saving you thousands of dollars in interest over the course of the mortgage.

» MORE: How to save for a down payment

Your credit score and income

For the best mortgage rates, financial institutions are likely to require a credit score of at least 680, though you have a good chance of being considered for a mortgage with a minimum credit rating of 600.

For home buyers who put down less than a 20% down payment, and are thus required to purchase default insurance, the official minimum credit score required for a mortgage with default insurance is 600.

The good news is that the Canadian Mortgage and Housing Corporation clearly states that only one borrower needs a score of at least 600, meaning that, if you’re applying with a co-borrower, it’s possible for one applicant to have a lower score.

What’s a “good” credit score?

Credit scores in Canada range from 300 (poor) up to 900 (excellent). Any number from 660 and up is considered a good score and is likely to get you approved for a mortgage, though each lender may have their own unique requirements.

What to know about credit scores if you’re new to Canada

To be considered creditworthy by potential lenders, you’ll want to aim for a credit score of at least 660. If you’re new to the country, your previous credit score is unlikely to come with you. This means you may have to rebuild your score from scratch so it may take time to build sufficient credit for a large loan like a mortgage.

While much of the work building a solid score is simply a matter of responsible fiscal management and patience, there are things you can do to start credit building, such as applying for a secured credit card and always paying your bills on time.

» MORE: How to get a better credit score

The mortgage stress test

No matter your credit score, you’ll have to pass Canada’s mortgage stress test to get a mortgage from a federally regulated financial institution.

The test (which applies even to those who can put down a down payment of 20% or more) is designed to ensure that you’ll be able to make your mortgage payments even if there’s a rise in interest rates.

To pass the test you need to show that you can make your mortgage payments even at the “minimum qualifying rate.” As of June 1, 2021, the minimum qualifying rate is based on either the higher of the benchmark rate of 5.25% or the mortgage rate offered by the lender plus 2%.

How to qualify for the lowest possible mortgage rate

Though lenders may each have different mortgage qualification criteria, some reliable ways to qualify for the lowest mortgage rates available include:

A strong 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. (Recall, however, that 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).

Manageable debt service ratios

Lenders will take a careful look at two key 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 32% 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.

» MORE: Understanding debt service ratios

Choosing the right type of interest

As noted previously, variable rate mortgages tend to have better interest rates than variable mortgage rates so if you’re looking for the lowest rates, a variable mortgage may be your best bet. The trade-off, however, is living with the uncertainty that your mortgage interest rates could rise at any time.

Is the lowest mortgage rate the best mortgage rate?

It may seem counterintuitive, but the “best” mortgage depends on more than just the annual percentage rate you can get for a mortgage — though that’s certainly a good place to start.

Interest rates alone don’t tell the whole story. Other factors worth comparing when looking at mortgage rates include fees, the terms and conditions of your mortgage contract, ease of online access and customer service. 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.

Use mortgage rates to estimate your mortgage payment

Getting a current rate quote is essential if you want an accurate estimate of what your monthly mortgage payment might look like.

For example, compare how your borrowing power and total costs might change with a 3% versus a 4% interest rate for a five-year, fixed rate $500,000 mortgage that’s amortized over 25 years.

With an interest rate of 4% you’d have paid $500,000.00 in principle, $289,030.31 in interest, for a total payment of $789,030.31 over 25 years.

With a rate of 3% you’d be paying $500,000.00 in principal, $209,868.25 in interest, for a total cost of $709,868.25 over 25 years.

That 1% difference in interest rate could end up saving you $79,162.06 over the course of your amortization period.

A handy way to accurately compare costs without doing a lot of math is by using an online mortgage calculator like the Government of Canada’s mortgage calculator.

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Frequently asked questions for mortgage rates in Canada

    • Why should I compare mortgage rates in Canada?

      Mortgage interest rates have a huge impact on the total cost of your loan.

      Getting the lowest rate possible will save you money, while paying an unnecessarily high rate will cost you money. That being said, rates shouldn’t be the only determining factor when comparing lenders; penalty costs, portability and overall customer service are also key considerations.

    • What are the current best mortgage rates in Canada?

      This page makes it easy to browse some of the best mortgage rates in Canada, from top lenders that have partnered with Homewise. You can easily customize these mortgage rates by loan type, rate type and your location. The rates are updated daily by to provide you with the most accurate options each day.

       

Historical Mortgage Rates in Canada

To give you an idea of how mortgage rates fluctuate over time, the table below shows monthly conventional  lending rates for mortgages with 5-year terms over the last 20 years, as reported by Statistics Canada.

Month and Year5-Year Mortgage Rate
Jan-20223.44%
Dec-20213.45%
Nov-20213.40%
Oct-20213.29%
Sep-20213.22%
Aug-20213.20%
Jul-20213.20%
Jun-20213.26%
May-20213.25%
Apr-20213.25%
Mar-20213.26%
Feb-20213.25%
Jan-20213.30%
Dec-20203.34%
Nov-20203.42%
Oct-20203.45%
Sep-20203.51%
Aug-20203.57%
Jul-20203.64%
Jun-20203.77%
May-20203.86%
Apr-20203.95%
Mar-20203.90%
Feb-20204.08%
Jan-20204.08%
Dec-20194.08%
Nov-20194.09%
Oct-20194.09%
Sep-20194.07%
Aug-20194.08%
Jul-20194.14%
Jun-20194.23%
May-20194.30%
Apr-20194.33%
Mar-20194.44%
Feb-20194.52%
Jan-20194.59%
Dec-20184.59%
Nov-20184.38%
Oct-20184.48%
Sep-20184.43%
Aug-20184.43%
Jul-20184.42%
Jun-20184.32%
May-20184.35%
Apr-20184.27%
Mar-20184.27%
Feb-20184.26%
Jan-20184.14%
Dec-20174.07%
Nov-20174.04%
Oct-20173.98%
Sep-20173.89%
Aug-20173.82%
Jul-20173.72%
Jun-20173.60%
May-20173.59%
Apr-20173.62%
Mar-20173.66%
Feb-20173.75%
Jan-20173.73%
Dec-20163.74%
Nov-20163.70%
Oct-20163.68%
Sep-20163.67%
Aug-20163.68%
Jul-20163.67%
Jun-20163.66%
May-20163.67%
Apr-20163.70%
Mar-20163.73%
Feb-20163.75%
Jan-20163.76%
Dec-20153.75%
Nov-20153.72%
Oct-20153.72%
Sep-20153.71%
Aug-20153.71%
Jul-20153.71%
Jun-20153.72%
May-20153.74%
Apr-20153.76%
Mar-20153.84%
Feb-20153.91%
Jan-20153.96%
Dec-20143.98%
Nov-20144.00%
Oct-20144.00%
Sep-20144.02%
Aug-20144.01%
Jul-20144.01%
Jun-20144.00%
May-20144.02%
Apr-20144.02%
Mar-20144.16%
Feb-20144.32%
Jan-20144.38%
Dec-20134.39%
Nov-20134.39%
Oct-20134.40%
Sep-20134.33%
Aug-20134.14%
Jul-20134.08%
Jun-20134.00%
May-20134.02%
Apr-20134.02%
Mar-20134.02%
Feb-20134.11%
Jan-20134.14%
Dec-20124.15%
Nov-20124.15%
Oct-20124.17%
Sep-20124.20%
Aug-20124.23%
Jul-20124.23%
Jun-20124.25%
May-20124.35%
Apr-20124.36%
Mar-20124.21%
Feb-20124.23%
Jan-20124.31%
Dec-20114.36%
Nov-20114.38%
Oct-20114.35%
Sep-20114.42%
Aug-20114.52%
Jul-20114.57%
Jun-20114.60%
May-20114.83%
Apr-20114.87%
Mar-20114.70%
Feb-20114.68%
Jan-20114.55%
Dec-20104.50%
Nov-20104.45%
Oct-20104.52%
Sep-20104.60%
Aug-20104.82%
Jul-20105.02%
Jun-20105.18%
May-20105.30%
Apr-20105.15%
Mar-20104.71%
Feb-20104.73%
Jan-20104.80%
Dec-20094.83%
Nov-20095.06%
Oct-20095.00%
Sep-20094.97%
Aug-20095.13%
Jul-20095.14%
Jun-20094.90%
May-20094.62%
Apr-20094.79%
Mar-20095.14%
Feb-20095.28%
Jan-20095.78%
Dec-20086.17%
Nov-20086.51%
Oct-20086.46%
Sep-20086.16%
Aug-20086.25%
Jul-20086.37%
Jun-20086.20%
May-20086.21%
Apr-20086.40%
Mar-20086.60%
Feb-20086.72%
Jan-20086.81%
Dec-20076.75%
Nov-20076.73%
Oct-20076.69%
Sep-20076.61%
Aug-20076.62%
Jul-20076.60%
Jun-20076.51%
May-20076.01%
Apr-20075.92%
Mar-20075.91%
Feb-20076.0%
Jan-20075.91%
Dec-20065.89%
Nov-20065.99%
Oct-20066.01%
Sep-20066.13%
Aug-20066.24%
Jul-20066.26%
Jun-20066.12%
May-20066.05%
Apr-20065.88%
Mar-20065.78%
Feb-20065.75%
Jan-20065.65%
Dec-20055.60%
Nov-20055.56%
Oct-20055.39%
Sep-20055.30%
Aug-20055.32%
Jul-20055.26%
Jun-20055.31%
May-20055.55%
Apr-20055.67%
Mar-20055.60%
Feb-20055.59%
Jan-20055.60%
Dec-20045.69%
Nov-20045.87%
Oct-20045.95%
Sep-20045.94%
Aug-20045.97%
Jul-20046.10%
Jun-20046.06%
May-20045.82%
Apr-20045.56%
Mar-20045.31%
Feb-20045.51%
Jan-20045.78%
Dec-20036.00%
Nov-20036.02%
Oct-20035.83%
Sep-20035.97%
Aug-20035.87%
Jul-20035.71%
Jun-20035.62%
May-20036.10%
Apr-20036.44%
Mar-20036.33%
Feb-20036.29%
Jan-20036.26%
Dec-20026.39%
Nov-20026.47%
Oct-20026.50%
Sep-20026.49%
Aug-20026.61%
Jul-20026.90%
Jun-20026.98%
May-20027.00%
Apr-20027.00%
Mar-20026.80%
Feb-20026.59%
Jan-20026.62%
Dec-20016.64%
Nov-20016.51%
Oct-20016.74%
Sep-20017.03%
Aug-20017.39%
Jul-20017.46%
Jun-20017.47%
May-20017.38%
Apr-20017.22%
Mar-20017.19%
Feb-20017.52%
Jan-20017.58%

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DIVE EVEN DEEPER

First-Time Home Buyer Guide

Ready to buy a home? See if you qualify as a first-time home buyer, find government help and get tips for choosing the right mortgage.

What is the First-Time Home Buyer Incentive?

The First-Time Home Buyer Incentive is a shared-equity program that lends buyers 5% or 10% of a home's price to bolster their downpayment.

What to Know About Mortgage Pre-Approval

Mortgage pre-approval is a lender offer to loan you a certain amount under specific terms, with your interest rate locked in for 90-130 days.

What Happens If You Break Your Mortgage Contract?

You will face a penalty for breaking your mortgage contract if you refinance before your term ends. The potential benefit may be worthwhile.