3-Year Fixed Mortgage Rates in Canada
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Current 3-year fixed mortgage rates in Canada
3-year fixed mortgage rates available from a broker
3-year fixed mortgage rates at Canada's Big 6 banks
Posted rate | Discounted rate | |
|---|---|---|
6.05% | 4.67% | |
6.14% | 4.76% | |
6.05% | 4.74% | |
6.05% | 4.78% | |
5.95% | -- | |
6.05% | 4.725% |
All discounted rates are annual percentage rates (APR), which include additional fees.
3-year fixed mortgage rate news: July 2026
At the beginning of July, it seemed as if it was going to be a good month for fixed-rate mortgage shoppers. Three-year fixed rates had eased as the war in Iran inched toward a peaceful conclusion.
Well, that’s all out the window. Now that bombs are once again falling in and around Iran, three-year government bond yields are on the rise. This matters because lenders use those yields to price their three-year fixed mortgage rates.
The risk — an all too familiar one at this point — is that yields increase to the point that lenders are forced to raise their fixed mortgage rates.
If you’re eyeing a three-year fixed rate for an upcoming home purchase, get pre-approved pronto to hedge against this frustrating risk.
3-year fixed mortgage rate forecast
In the current political climate, long-term fixed-rate projections are virtually impossible. The bond yields lenders use to price their fixed rates are determined by factors like the state of the economy and the expectations of individual investors. These factors can change daily when war threatens global oil supplies.
3-year fixed mortgage rates: A detailed breakdown
How to tell if a 3-year fixed is the way to go
Most Canadian homeowners break their mortgage mid-term. With fixed-rate mortgages, breaking and pre-paying can result in painful penalties.
A three-year fixed-rate mortgage hedges against that risk. Because the term is shorter, the potential for breaking should be less than if you go with a five-year fixed.
If you like the stability of a fixed rate but are unsure whether you'll stay in your home for five years, a three-year fixed might be a wise choice.
The sweet spot?
A three-year fixed can be an intriguing option. You get the stability of the ever-popular five-year fixed, but without having to commit for as long.
That shorter time horizon can be beneficial. You’ll renew your mortgage sooner, which could help you find a mortgage that better fits your financial situation. Three years into the future might be easier to plan for than five, too.
But a fixed rate of any length will still provide less flexibility than a variable-rate mortgage.
A variable rate can generally be swapped for a fixed rate during the mortgage term, which can be helpful if variable rates are rising at an unaffordable pace. The prepayment penalty triggered by a variable-rate mortgage is capped at three-months’ interest — much lower than what you’d pay if you had a fixed-rate.
3-year fixed vs. 5-year fixed | 3-year fixed vs. variable | |
|---|---|---|
Cost comparison | Historically, 3-year fixed rates have been the less expensive option, but not since the pandemic. | Variable rates have historically been lower than fixed rates. Variables have been the more volatile option since COVID. |
Prepayment penalty risk | About the same. The real risk with pre-payment penalties is the size of your mortgage, not the term you choose. | A 3-year fixed will generally be riskier. With variables, the maximum prepayment penalty tops out at three months’ interest |
Switchability | Neither can be switched to a variable rate mid-term. | A variable rate can be switched to a fixed rate for the remainder of the term without penalty. Fixed rates can't be switched. |
Exposure to rate fluctuations | Equal, since your rate doesn't increase with a fixed rate. You will have to renew sooner, though, which carries it's own set of risks. | Significantly higher with variable rates, which change every time your bank’s prime rate increases or decreases. |
Pros and cons of 3-year fixed-rate mortgages
Pros:
Predictability. You'll know what your mortgage payment will be for the entirety of the term.
Manageable time frame. Planning for three years is generally easier than planning for five.
Cons:
No ability to switch. You can't switch rate types if variable rates become attractive.
Pre-payment penalties. Breaking a fixed-rate mortgage of any length can trigger significant penalties.
How 3-year fixed mortgage rates are determined
The bond market
Here’s a simple way of thinking about it: when the yield on three-year government bonds rises or falls for a sustained period, three-year fixed mortgage rates eventually follow suit. You can track three-year bond yields by visiting the Bank of Canada website.
Your financial situation
The bond market influences three-year fixed rates, but the actual rate you’re offered depends on your financial situation, including your credit score, the size of your down payment and how much debt you're carrying.
A lender or brokerage might advertise a 3-year fixed rate for 4%, but that doesn’t mean everyone will qualify for it.
Frequently asked questions
Is a 3-year fixed mortgage rate a good idea?
Three-year fixed-rate mortgages can be a good idea in a few scenarios. If you think you might move before the end of a five-year mortgage term, opting for three years might save you from paying a pre-payment penalty. If rates fall during a three-year term, you’ll have a better chance of renewing at a lower rate than if you signed on for five-years.
What's a good 3-year fixed mortgage rate?
As of July 2026, three-year fixed rates generally over 4%, but some mortgage brokerages are offering rates lower than 3.9%. If you can score a rate around 3.85% — and the mortgage itself aligns with your needs — you've found a good deal.
Will three-year fixed mortgage rates go down in 2026?
Three-year fixed mortgage rates, and fixed mortgage rates in general, have been driven higher by the Iran war. Until the war is brought to an end and no longer poses a threat to the global economy, the bond yields lenders use to price their fixed rates will stay elevated. That makes lower fixed rates less likely in the near term.
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Clay Jarvis
Clay Jarvis
Clay Jarvis