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Published November 12, 2024

The Best Mortgage Rates in Canada

Quickly explore Canadian mortgage rates from bank and non-bank lenders. Find the best fixed or variable mortgage rate for your home buying needs.

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Edited By

Rates updated: June 03, 2024

Mortgage Type

Purchase Price

Down Payment

Province

Term

Fixed

Variable

1-Year

Rate

5.84%

Est. payment

: $2,856.00/mo
Neo Financial
:
EXPLORE NOW
3-Year

Rate

4.29%

Est. payment

: $2,448.00/mo
Scotia Bank
:
EXPLORE NOW

Rate

5.05%

Est. payment

: $2,644.00/mo
Radius Financial
:
EXPLORE NOW
4-Year

Rate

4.34%

Est. payment

: $2,461.00/mo
Scotia Bank
:
EXPLORE NOW
5-Year

Rate

4.19%

Est. payment

: $2,423.00/mo
Marathon Mortgage
:
EXPLORE NOW

Rate

4.85%

Est. payment

: $2,591.00/mo
Manulife Financial
:
EXPLORE NOW

Disclaimer: These rates do not include taxes, fees, and insurance. Your actual rate and loan terms will be determined by the partner’s assessment of your creditworthiness and other factors. Any potential savings figures are estimates based on the information provided by you and our advertising partners. Mortgage Brokerage Licensed in ON #12984, BC #X301004, MB and AB. Homewise can pursue mortgage brokering activity in SK, NL, NS and NB.

Data source:

The best mortgage rates from Canada’s Big 6 banks

Click on a bank’s name to see a full list of its posted and discounted mortgage rates.

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Canadian mortgage news: November 2024

For the first time in a while, fixed mortgage rates are in the news. Unfortunately for Canadian mortgage shoppers, most of the talk has been around fixed rates rising in response to the recent U.S. election.

U.S. government bond yields rose following Trump’s win on November 5, 2024, the result of investors selling their bonds and moving into more growth-oriented assets. When bond yields in the U.S. fall, the yields on three- and five-year government bonds in Canada tend to follow suit. 

This is significant because it’s those bond yields that determine Canada’s three- and five-year fixed mortgage rates. When yields increase over an extended period, fixed rates do too.

There was a notable spike in yields on November 6, but they returned to their pre-election levels the next day. Fixed mortgage rates haven’t moved, but with yields being significantly higher than they were in October, there’s no reason to believe that fixed rates will move anywhere but up.

For now, the lowest fixed mortgage rates in Canada are hovering around 4%.  

Variable mortgage rates remain stable, and won’t change until the Bank of Canada delivers its next overnight rate decision on December 11. Another cut is likely, but it’s difficult to say whether the Bank will announce another jumbo 50-basis point reduction. If it does, variable mortgage rates will once again be Canadians’ most affordable option. 

Mortgage rate forecast

Will Canadian mortgage rates come down in 2024?

Canadian mortgage rates are expected to decrease further in 2024. When, and by how much, will depend on the state of the Canadian economy. 

If the Bank of Canada continues cutting its overnight rate, variable mortgage rates might fall another 50-100 basis points by the end of 2024.

Fixed mortgage rates are trickier to read since they’re based on government bond yields. Economic turbulence generally drives yields, and fixed mortgage rates, downward. Stability in the global economy could mean fixed rates are as low as they’re going to get this year.

4 ways to get the best mortgage rate

Borrowers with a credit score of 680 or higher tend to get the best mortgage rates. 

Lenders perceive borrowers with high credit scores as lower risks. You’re still likely to be considered for a mortgage if you have a score of 600 or higher, but you may have to work with alternative lenders who offer higher rates.

Lenders look at a pair of debt service ratios  when deciding whether to give someone a mortgage. The lower these ratios are, the better your chances of getting a lower mortgage rate.

  • Your gross debt service (GDS) ratio, which measures how much of your pre-tax household income goes toward housing costs, should not exceed 39% of your gross annual income.
  • Your total debt service (TDS) ratio, which includes GDS and other debts,should not be more than 44% of your pre-tax income. 

Cobbling together a significant down payment can make you seem like less of a credit risk to lenders, who may then offer you a lower rate.

Making a down payment of at least 20% will also eliminate the need to purchase mortgage default insurance. These insurance premiums get added to your mortgage amount, where they’ll generate higher interest charges. 

Negotiating your mortgage rate is a must. You can never assume that a lender’s first offer will be its best. Ask if the rate you’ve been presented can be improved upon. 

No matter what answer you receive, tell your lender that you’ll think about it, and that you plan to do some comparison shopping before making a decision. The threat of losing your business could work to your advantage.

Comparing Canadian mortgage rates

The interest rate you’re charged has a huge impact on the total cost of your mortgage, so It’s important to compare rates before applying for a mortgage. Not comparing rates could lead to paying more for your mortgage than necessary.

When comparing rates, also compare lenders and mortgage options to ensure you get the product and service you need.

How to choose between lenders that offer similar mortgage rates 

Compare other product features

To choose the right mortgage, make sure you’re looking at more than just the rate. The deciding factor might be something less obvious, such as:

Compare APRs

The annual percentage rate (APR)  includes the interest rate, fees and other closing costs that are set by the lender.

Looking at APR will give you a more accurate idea of the true cost of your mortgage. Two lenders might both offer a 4% mortgage rate on a similar product, but if their APRs differ, one will cost you more than the other.

What’s a “good” mortgage rate?

A good mortgage rate is the lowest possible rate you can qualify for based on the amount you need to borrow and the mortgage product that fits your needs.

According to Canada Mortgage and Housing Corporation, 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. Relative to the average, 5% would have been an excellent rate in 2001, but it wouldn’t have been so great in 2021.

Unfortunately, you can’t go back in time to score a better mortgage rate. All you can do to find the best deal is compare today’s current mortgage rates. Below, you can take a look at the average posted, or advertised, rates for certain conventional mortgage products at Canada’s chartered banks, according to the Bank of Canada.

TERMCONVENTIONAL MORTGAGE RATES
1-year fixed7.24%
3-year fixed6.54%
5-year fixed6.49%
Prime rate5.95%

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

» MORE: How mortgages work in Canada

Choosing the right mortgage interest rate type

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

In a nutshellBenefitsRisks
Fixed-rate mortgageYou pay the same interest rate for the entire length of your mortgage term.Predictable payments can be easier to plan for. High prepayment penalties if you break your mortgage early.
Variable-rate mortgagesYour interest rate rises or falls along with your bank’s prime rate. If rates decrease, your mortgage gets cheaper.
Can be switched to a fixed-rate at any time.
If mortgage rates rise and stay elevated, your mortgage could cost you significantly more than you budgeted for.
Hybrid mortgagesPart of your mortgage is subject to a fixed rate of interest and the rest to a variable rate. Can help you navigate a volatile rate environment. Complicated; requires a good understanding of mortgage rate dynamics.

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

How Canadian mortgage rates are determined

Credit score

For the best mortgage rates, financial institutions are likely to require a credit score of at least 680. You can still get approved for a mortgage with a lower credit score, but you might have to borrow from a B lender that charges higher interest rates. 

Credit history

If you have limited experience as a borrower, or have endured negative credit events, that’ll be reflected in your credit history. A brief or less-than-glowing credit history generally means paying higher rates to lenders that offer bad credit mortgages.  

Down payment savings

Your down payment influences the size of the loan you need and the amount of risk your lender takes on. A larger down payment means more equity for you upfront and less risk for your lender, who might offer you a lower rate as a result. 

The Bank of Canada’s overnight rate

The overnight rate is the interest rate financial institutions charge one another to borrow money. The Bank of Canada increases or decreases this rate based on the country’s inflation rate.

If inflation is rising too quickly, the Bank will try to curb it by increasing its benchmark rate to discourage spending and borrowing. If the economy is slowing and inflation is not a concern, the BoC will lower the overnight rate to stimulate economic activity.

Lenders’ prime rates

When the overnight rate rises, it costs financial institutions more to borrow money from each other. To recoup their losses, banks pass on this expense to their customers by raising their prime rate

Variable mortgage rates are directly tied to a financial institution’s prime rate. When a bank raises or lowers its prime rate, variable mortgage rates rise or fall to the same extent.

The government bond market

Canadian lenders’ fixed mortgage rates follow government bond yields quite closely. If five-year bond yields increase (which happens when bond prices fall), lenders might raise their five-year fixed mortgage rates.

Historically, five-year fixed rates have usually been around 150 basis points higher than the five-year bond yield.

The bond market does not affect variable mortgage rates.

» MORE: How to get a better credit score

Historical mortgage rates in Canada

Here’s a little data to give you an idea of how Canadian mortgage rates have fluctuated over time.

Average Canadian Mortgage Rates: June 2023-June 2024

Annual Averages: Posted Fixed Mortgage Rates at Canada’s Major Banks

Year1-Year Fixed Mortgage Rate3-Year Fixed Mortgage Rate5-Year Fixed Mortgage Rate
20237.15%6.61%6.68%
20224.46%4.90%5.65%
20212.80%3.49%4.79%
20203.25%3.79%4.95%
20193.64%4.17%5.27%
20183.47%4.23%5.27%
20173.16%3.48%4.77%
20163.14%3.39%4.66%
20152.97%3.42%4.67%
20143.14%3.70%4.89%
20133.08%3.74%5.23%
Data courtesy the Bank of Canada.

Frequently asked questions about Canadian mortgage rates

What are the best mortgage rates in Canada right now?

As of November 2024, the lowest mortgage rates are attached to five-year fixed-rate mortgages, with some lenders offering rates below 4% on certain products. Variable mortgage rates are generally above 5.5% at large banks, but are considerably lower at mortgage brokerages, where rates of 4.75% can be found.

How can I get a lower mortgage rate?

You might be offered a lower mortgage rate if you provide a larger down payment or pay down your debts to lower your debt ratios and improve your credit score. It can also be worthwhile to compare rates among different lenders and negotiate the best rate possible with the one you decide to work with.

What happens at the end of a mortgage term?
What happens at the end of a mortgage term?

When your mortgage term ends you’ll have a few options to choose from. You can either:

Will I get a lower mortgage rate working with a mortgage broker?

Quite possibly. Unlike a bank’s mortgage advisor, a mortgage broker has relationships with multiple lenders. That allows them to shop around for the mortgage product that best suits your needs. Mortgage brokers can negotiate on your behalf and provide alternative paths to homeownership if your application is turned down.

What’s the lowest mortgage rate in Canadian history?

From January to March 2021, it was possible to get a five-year fixed mortgage rate of 1.39%.  From November 2021 to January 2022, you could find variable mortgage rates as low as 0.85%.

What are mortgage prepayment penalties?

Prepayment penalties are fees that may be incurred if you pay off too much of your mortgage before the end of its term. If you have a closed variable-rate mortgage, your prepayment charge will be three months’ interest on the prepayment amount. For fixed-rate mortgages, the penalty is generally calculated using an interest rate differential (IRD), which varies by lender.

Is the rate the most important part of a mortgage?

Finding the right mortgage depends on more than just the interest rate — though that’s a good place to start.

Interest rates don’t tell the whole story. Other factors worth comparing when looking at mortgage rates include:

  • Fees. Depending on where you get your mortgage, you may be charged various fees that you weren’t expecting. Alternative and private mortgages, for example, tend to include fees that Big Six banks don’t charge.
  • Prepayment flexibility. Some mortgage products allow more leeway in making prepayments than others. If you might be in a position to pay off your mortgage early, you won’t want a mortgage that charges stiff prepayment penalties for doing so. 
  • Customer service. It might be a priority to work with a lender known for quickly answering questions or smoothly making adjustments to its clients’ mortgages. 
Mortgage Glossary

Amortization period

The amortization period is the length of time it takes to pay off your mortgage in full. The most common amortization period in Canada is 25 years.

If your down payment is less than 20% of a home’s value, you’re not allowed to exceed an amortization of 25 years, but you can secure an amortization period of up to 35 years if your down payment is large enough.

 Some borrowers opt for the shortest amortization period possible, because it means paying less interest overall and potentially saving thousands of dollars. A longer amortization means smaller monthly payments, but years of additional interest charges.

Closed mortgage

A closed mortgage locks you into a mortgage contract for a set period of years. If you want to pay off a closed mortgage early, you might be charged a steep prepayment penalty.

High-ratio mortgage

A high-ratio mortgage involves borrowing a mortgage principal that’s worth more than 80% of a home’s value.

Mortgage default insurance

If your down payment is less than 20% of a home’s value, you’ll be required to purchase mortgage default insurance. Mortgage default insurance protects your lender in the event you default on your mortgage. 

Mortgage default insurance premiums are determined by the size of your down payment. If your down payment is between 15% and 19.99%, for example, your premium will be 2.8% of your mortgage amount. For down payments between 5% and 9.99%, the premium is 4%.

Mortgage term

The term is the length of your mortgage contract. In Canada, mortgage terms can run anywhere from six months to 10 years. Once your term expires, you’ll have to renew your mortgage, refinance it or pay it off in full. 

Historically, the most popular mortgage term among Canadians has been a five-year term with a fixed interest rate.

Open mortgages

An open mortgage allows you to pay off the balance of your loan at any time without incurring any penalty charges.

You pay for this flexibility, though. Open mortgage rates are some of the highest you’ll encounter, so you might actually lose money if you don’t pay off an open mortgage early.

Payment frequency

Making a single monthly mortgage payment isn’t your only option. You’ll generally be offered several different payment frequencies to choose from, including:

  • Semi-monthly (two payments per month; 24 payments per year).
  • Bi-weekly (one payment every 14 days; 26 payments per year).
  • Weekly (one payment every 7 days; 52 payments per year).

The more frequently you make your mortgage payments, the faster you’ll pay off your mortgage.

Stress test

You’ll have to pass Canada’s mortgage stress test to get a mortgage from a federally regulated financial institution. The test is designed to ensure that you’ll be able to make your mortgage payments if there’s a significant rise in interest rates.

To pass the test, your finances have to support a mortgage payment at the “minimum qualifying rate.” Since June 1, 2021, the minimum qualifying rate has been the higher of either the benchmark rate of 5.25% or the mortgage rate offered by the lender plus 2%. 

To secure an advertised rate of 5.5%, for example, your finances have to be strong enough to afford the mortgage if interest rates rose to 7.5%.

If you can’t pass the stress test at your lender’s offered rate, you’ll either have to borrow less or make a bigger down payment to reduce the mortgage amount.

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