How Low Can Canadian Mortgage Rates Go?
After the significant rate cuts of 2025, many Canadians are wondering: how much lower can rates go?
Current Rate Situation
| Rate Type | Current Range | Historical Low | Historical High |
|---|---|---|---|
| 5-Year Fixed | 3.89% - 4.49% | 1.39% (2021) | 5.89% (2023) |
| Variable | 4.45% - 5.20% | 1.45% (2021) | 7.20% (2023) |
| Prime Rate | 4.95% | 2.45% (2021) | 7.20% (2023) |
Bank of Canada Rate Outlook for 2026
Most economists expect 0-2 additional rate cuts in 2026, with rates approaching neutral levels.
Fixed vs Variable: Strategic Timing
Choose Variable If:
- You believe rate cuts will be aggressive
- You can handle payment fluctuations
- You're comfortable with some uncertainty
Choose Fixed If:
- You want payment certainty
- Current fixed rates are acceptable
- You're risk-averse
Frequently Asked Questions
Will mortgage rates go below 4% in 2025?
It's possible but not guaranteed. For 5-year fixed rates to sustainably break 4%, we'd need bond yields around 2.50%.
Should I wait for rates to drop before buying a house?
Waiting is risky. Home prices may rise, offsetting rate savings.
When will we see sub-3% mortgage rates again?
Sub-3% rates were historically unusual and required near-zero Bank of Canada policy rates. This scenario would require a significant economic downturn.
Contact us for personalized rate guidance.
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