Best Mortgage Rates in Prince Edward Island
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Prince Edward Island mortgage rate update: July 2025
Variable rates are holding steady.
The BoC could change rates on July 30.
Fixed rates have seen recent declines but could increase.
July has brought a new sense of uncertainty to PEI mortgage rates.
In the last half of June, falling government bond yields allowed lenders and brokerages to lower their fixed rate offers. But July has seen those bond yields start creeping up again. If those bond yields keep increasing over a sustained period of time, fixed rates are likely to edge up, too.
As of July 8, 2025, three- and five-year fixed mortgage rates can still be found for around 3.9% at some brokerages, but they’re generally 4% or higher. If you’re worried about rates rising before you secure a mortgage this summer, consider getting pre-approved and locking in a rate sooner rather than later.
Variable mortgage rates have been stable since the Bank of Canada decided to hold its overnight rate at 2.75% on June 4. The country's lowest variable mortgage rates will stay around 4% until at least July 30, when the BoC is scheduled to make its next overnight rate announcement.
A rate cut in July will depend on both inflation and the state of Canada's tariff-rattled economy, so it'll be a challenging call for the Bank to make. Analysts expect the BoC to cut its overnight rate another two times this year, which could shave at least 0.5% off of current variable rates.
A July rate cut would make variable rates the most affordable option for borrowers in PEI. It's been over two years since that was the case.
What’s a good mortgage rate in Prince Edward Island right now?
As of July 2025, you can find three-year fixed and variable mortgage rates for around 4% at some PEI mortgage brokerages, but five-year fixed rates are generally 4.1% or higher.
2025 Prince Edward Island mortgage rate forecast
Mortgage rates may decrease further in the second half of 2025.
The Bank of Canada is expected to reduce its overnight rate again twice before the end of the year, which would lower variable mortgage rates by at least 0.5% versus today’s levels.
Fixed mortgage rates will likely continue hovering between 3.75% and 4.25% for the remainder of 2025.
Read more about the Bank of Canada's latest rate announcement.
The BoC makes policy interest rate announcements eight times a year. Find out how its latest decision might impact Canada's housing market.
PEI housing market update: May 2025
Despite the headwinds caused by the U.S. tariff war, Prince Edward Island’s housing market had a relatively solid April. Home sales for April 2025 were up 4% year-over-year, according to the Prince Edward Island Real Estate Association, and 8.1% higher than the 10-year average for the month.
The average sale price in PEI rose 10.9% year-over-year to hit $417,794. New listings were also on the rise, increasing by more than 5% compared to April 2025.
Prince Edward home buyer resources
Prince Edward Island first-time home buyer programs
Applicants for the PEI Down Payment Assistance Program can receive up to 5% of a home’s purchase price, up to a maximum loan of $17,500, as a loan to be used for the down payment.
After an optional one-year grace period, the amount must be repaid in full, though no interest is charged. Interest of 5% per year is applied if you default on your repayments. Eligibility requirements include a household income of $100,000 or less and a home price of $350,000 or less.
Prince Edward Island land transfer taxes
The property transfer tax on Prince Edward Island is 1% of the greater of the home's purchase price or its assessed value.
- So, if the purchase price was $250,000, the transfer taxes will be $2,500.
Mortgage Calculators
Frequently asked questions
How do PEI lenders determine mortgage rates?
How do PEI lenders determine mortgage rates?
The mortgage rate you’re offered in PEI will be based on two primary factors; one depends on the state of the economy, the other on your financial situation.
Economic factors
Variable mortgage rates are influenced by the Bank of Canada’s overnight rate. When the overnight rate increases or decreases, a lender’s prime rate follows suit. Variable mortgage rates are based on a lender’s prime rate, so as the prime rate rises or falls, so do variable rates.
Fixed mortgage rates are determined by activity in the government bond market, particularly the yields on one-, three- and five-year bonds. Fixed mortgage rates follow the movement of those yields.
Your financial situation
Factors specific to you also affect the rates you’re offered. These include:
Your credit score.
Your income.
Your total debts.
The loan type you choose.
The amount you’re borrowing.
The term length and amortization period of your loan.
Lenders look for signs of risk when assessing these aspects of your finances. The riskier they perceive you to be as a borrower, the higher the rate they’re likely to offer you.
Will mortgage rates come down in 2025?
Will mortgage rates come down in 2025?
The Bank of Canada overnight rate has been unchanged since March. If the bank lowers the rate, lower variable mortgage rates will follow. Fixed mortgage rates will likely continue hovering between 3.75% and 4.25% for much of the year.
How do you qualify for a lower mortgage rate in PEI?
How do you qualify for a lower mortgage rate in PEI?
Some factors behind rates are beyond your control, but there are steps you can take to possibly qualify for the best mortgage rates. For example, you can:
Improve your credit score. A higher credit score generally results in better offers. Get a better score by eliminating existing debt and paying future bills in full and on time.
Increase your income. It’s not always easy, but any additional income will improve your financial position. Lenders look at your income to assess your ability to afford a mortgage.
Decrease your total debts. Pay down personal loans, student loans or other types of debts. Lenders consider your total debt load when determining the details of your loan.
Consider all your options. See if adjusting the loan type, the term length or the amortization period of your loan could help.
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Clay Jarvis