Current Variable Mortgage Rates in Canada
The best variable mortgage rates at Canada’s Big 6 banks
Bank | Rate | Bank | Rate |
|---|---|---|---|
4.10% (4.12% APR) | 3.65% (3.68% APR) | ||
4.05% (4.07% APR) | 4.90% (4.91% APR) | ||
4.10% (4.14% APR) | 4.24% (4.261% APR) |
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.
Variable mortgage rate news: July 2026
Variable mortgage rates aren’t likely to see much improvement this month.
Variable rates are tied to the Bank of Canada’s overnight rate, which hasn’t budged since October 2025. With the Canadian economy showing signs of life — monthly GDP growth was 0.5% in April — the Bank is unlikely to rock the boat with a rate hike or cut this month.
Variable rates starting around 3.4% should be available for most of the summer.
Variable mortgage rate forecast
The future of variable mortgage rates in 2026 depends on how the Bank of Canada approaches its overnight lending rate. So long as the Bank holds the overnight rate, variable mortgage rates will not change to a significant degree.
Analysts expected the Bank to hold the overnight rate for most of 2026, but the war in Iran has changed the outlook. If high oil prices trigger a significant rise in inflation, the Bank of Canada may have to raise its overnight rate at least once in 2026.
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.
Is it a good idea to choose a variable mortgage rate right now?
Choosing a variable rate in 2026 isn't necessarily a slam dunk. There's a lot to consider:
As of July, variable rates are as low as they’ve been in more than three years. They're significantly lower than fixed rates, which makes going variable attractive.
However, variable rates will increase if the Bank of Canada is forced to raise its overnight rate. This looks more likely now that the war in Iran is threatening higher inflation.
If variable rates somehow become more expensive than fixed rates, you have the option of switching to a fixed rate.
Variable rates often trigger lower pre-payment penalties than fixed rates, so if you have to move or sell ahead of schedule it's less expensive.
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.
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.
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.
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.
Frequently asked questions
When will variable mortgage rates decrease?
Prior to the Iran war, it looked as if variable rates would stay put for much of 2026, as the Bank of Canada was expected to hold its overnight rate at 2.25% for much of the year.
As of July, the most likely scenario is that the Bank will continue holding. If inflation ramps up due to the Iran war, the Bank may be forced to hike its overnight rate, which would increase variable mortgage rates.
What's a good variable mortgage rate today?
As of July 2026, variable mortgage rates can be found for around 3.4% at some mortgage brokerages and direct lenders.
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Clay Jarvis
Clay Jarvis
Clay Jarvis