You're checking rates every day, refreshing lender websites, and wondering if you should lock in now or wait another week. Whether you're buying, renewing, or refinancing, understanding how Canadian mortgage rates work—and where they're headed—helps you time your decision and negotiate from a position of strength.
What Are Current Mortgage Rates in Canada?
Mortgage rates fluctuate based on economic conditions, Bank of Canada policy, and individual lender strategies. After the volatility of 2022-2024, rates have begun to stabilize in early 2025.
Current Rate Ranges (approximate):
| <p> | Mortgage Type | Rate Range |
|---|---|---|
| 5-Year Fixed | 4.29% - 5.49% | |
| 3-Year Fixed | 4.59% - 5.29% | |
| 2-Year Fixed | 4.79% - 5.49% | |
| 5-Year Variable | Prime - 0.50% to Prime + 0.50% | |
| HELOC | Prime + 0.50% to Prime + 1.00% | </p> |
Rates change daily. For current rates, contact our team.
What Determines Today's Mortgage Rates?
Several factors influence the rates you're offered:
Bank of Canada Overnight Rate
The overnight rate directly affects variable mortgage rates and HELOCs. When the BoC raises or lowers this rate, your variable payments adjust accordingly. The Bank meets eight times yearly to set this rate based on inflation targets and economic conditions.
Government Bond Yields
Fixed mortgage rates track the Canadian government bond market, particularly 5-year bond yields. When bond yields rise, fixed rates typically follow within days or weeks.
Your Personal Financial Profile
Lenders assess your individual risk through:
- Credit score: Higher scores unlock better rates
- Down payment: More equity means less risk for lenders
- Debt ratios: Lower debt-to-income ratios qualify for preferred rates
- Employment stability: Consistent income improves your rate offers
Lender Competition
Different lenders have different risk appetites and funding costs. Shopping around—or working with a broker—often yields better rates than going to your bank directly.
Fixed vs Variable: Which Is Better Right Now?
This decision depends on your risk tolerance and the current rate environment.
The Case for Fixed Rates
- Certainty: Know exactly what you'll pay for your entire term
- Protection: Shield yourself from potential rate increases
- Budgeting: Easier to plan long-term finances
Fixed rates make sense when the spread between fixed and variable is narrow, or when rate increases seem likely.
The Case for Variable Rates
- Historical savings: Variable rates have saved money in most 5-year periods historically
- Flexibility: Often lower penalties if you break your mortgage
- Potential for decreases: If the Bank of Canada cuts rates, you benefit immediately
Variable rates appeal to those who can handle payment fluctuations and have financial cushion.
Current Spread Analysis
When variable rates sit significantly below fixed, the savings potential is higher. When they're close together, the risk-reward shifts toward fixed.
Learn more in our detailed fixed vs variable mortgage comparison.
How to Get the Best Rate Today
Check Your Credit Score First
Your credit score significantly impacts your rate offers. Aim for 680+ for best rates, though 620+ can still qualify you. Before applying, review your credit and address any errors or issues.
Compare Multiple Lenders
Big banks often don't offer their best rates upfront. Compare:
- Major banks
- Credit unions
- Monoline lenders
- Online lenders
You can often save 0.25% to 0.50% or more.
Work with a Mortgage Broker
Brokers access rates from 50+ lenders, including exclusive rates not available directly. They cost you nothing—lenders pay broker fees.
Get Pre-Approved Early
A pre-approval locks in your rate for 90-120 days, protecting you from increases while you house hunt.
Rate Trends: What's Next?
While no one can predict rates with certainty, here's what economists are watching:
Factors Suggesting Stable/Lower Rates:
- Inflation moderating toward the 2% target
- Bank of Canada signaling a careful approach
- Economic growth stabilizing
Factors Suggesting Higher Rates:
- Persistent housing demand
- Global economic uncertainty
- Currency fluctuations affecting import prices
For the latest analysis, see our Bank of Canada rate predictions.
Insured vs Uninsured Rate Differences
If your down payment is less than 20%, your mortgage requires insurance (CMHC, Sagen, or Canada Guaranty). Interestingly, insured mortgages often get slightly better rates because they're lower risk for lenders.
| <p> | Down Payment | Rate Impact |
|---|---|---|
| 5-19% (insured) | Best rates available | |
| 20%+ (uninsured) | Slightly higher rates | |
| 35%+ (conventional) | Potential for premium rates | </p> |
Understanding Rate Types
Posted Rates vs Discounted Rates
Posted rates are the advertised rates lenders display publicly. Discounted rates—what you actually pay—are typically 0.50% to 1.50% lower. Always negotiate or use a broker to access discounted rates.
Special Rates for First-Time Buyers
Some lenders offer preferential rates for:
- First-time home buyers
- New-to-Canada applicants
- Specific professional groups (doctors, engineers, etc.)
Ask about these programs when shopping.
FAQ
Q: How often do mortgage rates change?
A: Fixed rates can change daily based on bond markets. Variable rates change when the Bank of Canada adjusts the overnight rate (eight scheduled announcements per year).
Q: Can I negotiate my mortgage rate?
A: Absolutely. Banks expect negotiation. Bring competing offers and be prepared to walk away. Better yet, use a broker who negotiates on your behalf.
Q: Why is my quoted rate different from advertised rates?
A: Advertised rates assume ideal scenarios (high credit score, standard property, conventional employment). Your individual rate reflects your specific situation.
Q: Should I take a shorter term if rates seem high?
A: A shorter term (2-3 years) lets you renegotiate sooner if rates drop, but you pay for rate renegotiation more often. Consider your overall financial plan.
Q: What's the stress test rate right now?
A: You must qualify at the higher of your contract rate plus 2%, or the Bank of Canada's benchmark rate (currently around 5.25%). Learn more about the mortgage stress test.
What's Next
Ready to see what rate you qualify for? Get pre-approved today and lock in your rate while shopping for your perfect home. Our mortgage specialists compare rates from 50+ lenders to find you the best deal.
Ready to Get Started?
Contact us today for personalized mortgage advice and competitive rates.
