50 Years of Canadian Mortgage Rates
Understanding rate history provides context for today's decisions.
Historical Rate Overview
| Era | 5-Year Fixed Average | Context |
|---|---|---|
| 1970s | 10-12% | Oil crisis inflation |
| Early 1980s | 18-21% | Peak rates |
| Late 1980s | 11-14% | Gradual decline |
| 1990s | 7-10% | Disinflation era |
| 2000s | 5-7% | Stable low inflation |
| 2010s | 3-5% | Post-crisis low rates |
| Early 2020s | 1.5-3% | Pandemic emergency rates |
| 2022-2023 | 5-7% | Inflation fighting |
| 2024-2025 | 4-5% | Rate normalization |
The 1981 Peak: Lessons Learned
At 21%+ mortgage rates in 1981:
- Monthly payment on $100K mortgage: $1,750
- Many homeowners lost properties
- Variable rate holders devastated
Lesson: Stress test your ability to handle rate increases.
Variable vs. Fixed: Historical Analysis
Over 50 Years:
- Variable rates have "won" approximately 85% of the time
- Average savings: 0.5% to 1% per year
- BUT: Variable has periods of significant underperformance
What History Teaches Us
- Rates Revert to Mean - Long-term average 5-year fixed: ~6%
- Economic Cycles Matter - Rates follow inflation and economic conditions
- Prediction Is Difficult - Few predicted 2022's rapid rate rise
- Your Situation Matters Most - Historical averages don't pay your mortgage
Frequently Asked Questions
Will rates ever return to 2020 lows?
Unlikely without another major crisis. Those rates were emergency measures.
What's a "normal" mortgage rate?
Historically, 5-7% for 5-year fixed is typical. Below 5% is advantageous.
Contact us for rate guidance based on current conditions.
Ready to Get Started?
Contact us today for personalized mortgage advice and competitive rates.
