5-Year Cash Back Mortgage Rates

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Mortgage Amount If you are buying a home, the mortgage amount is the home price, minus your down payment, plus CMHC insurance if your down payment is less than 20%. If you are renewing or refinancing your mortgage, your mortgage balance is the value of your the mortgage.
Type Please tell us which type of mortgage rate you want. A fixed mortgage rate is one that stays the same throughout the duration of your mortgage term. A variable mortgage rate is attached to Prime, which means it will fluctuate if Prime goes up or down. An open mortgage is one that can be prepaid anytime without penalty, but comes with higher rates. And a cash back mortgage gives you the option to borrow some extra cash when you buy your home. Term The mortgage term is the amount of time a home buyer commits to the rules, conditions and interest rate agreed upon with the lender. The term can be anywhere from six months to 10 years, with a 5-year mortgage term being the most common duration. Location Please ensure your location is correct in order to find the best rates available in your area.
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  years

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  years
Type Please tell us which type of mortgage rate you want. A fixed mortgage rate is one that stays the same throughout the duration of your mortgage term. A variable mortgage rate is attached to Prime, which means it will fluctuate if Prime goes up or down. An open mortgage is one that can be prepaid anytime without penalty, but comes with higher rates. And a cash back mortgage gives you the option to borrow some extra cash when you buy your home. Term The mortgage term is the amount of time a home buyer commits to the rules, conditions and interest rate agreed upon with the lender. The term can be anywhere from six months to 10 years, with a 5-year mortgage term being the most common duration. Location Please ensure your location is correct in order to find the best rates available in your area.

Update results

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Update results

Hit enter or click outside the box to refresh your results
Type Please tell us which type of mortgage rate you want. A fixed mortgage rate is one that stays the same throughout the duration of your mortgage term. A variable mortgage rate is attached to Prime, which means it will fluctuate if Prime goes up or down. An open mortgage is one that can be prepaid anytime without penalty, but comes with higher rates. And a cash back mortgage gives you the option to borrow some extra cash when you buy your home. Term The mortgage term is the amount of time a home buyer commits to the rules, conditions and interest rate agreed upon with the lender. The term can be anywhere from six months to 10 years, with a 5-year mortgage term being the most common duration. Location Please ensure your location is correct in order to find the best rates available in your area.
More options
Fewer options
  years

Update results

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Location Please ensure your location is correct in order to find the best rates available in your area.
Rate Provider Hold until Prepayment options Payment
3.54%
3% Cash Back
Mortgage Intelligence Dereck Landry
Lic. 10428
Sep 9
No pre-approval
20 % Lump Sum 20 % Regular $ Get this rate
4.79%
5% Cash Back
Laurentian Oct 24
No pre-approval
15 % Lump Sum 15 % Regular $ Get this rate
6.14%
5% Cash Back
PC Financial Nov 23
No pre-approval
20 % Lump Sum 25 % Regular $ Get this rate
No pre-approval
Lump Sum N/A Regular N/A Get this rate

Cash Back Mortgages

Description

Cash back mortgages return to you a percentage of your mortgage principal in a lump sum when your mortgage closes. Cash back mortgages differ from '0% down' mortgages - which are no longer available in Canada - as they still require you to put your own money up front for a down payment, but you receive the lump sum after your mortgage closes.

The chart below provides an overview of the different cash back mortgage products offered by various Canadian banks.

Pre-payment privileges: the annual lump sum percentage or monthly payment percentage you are permitted to increase your mortgage payment.

Penalty: if you break your mortgage before its term maturity, you must pay the designated cash back mortgage penalty in addition to the standard penalty for refinancing.


Cash Back Chart

Bank Cash Back % Maximum Cash Back Pre-payment Options Penalty (in addition to IRD)
National Bank 5.5% $20,000 Lump Sum: 10%
Monthly: 100%
Allocation of cash lump sum
PC Financial 5% Unlimited Lump Sum: 20%
Monthly: 25%
Locked in for first 3 years
Full cash re-payment after 3 years
TD Bank 4.5% $25,000 Lump Sum: 15%
Monthly: 100%
Allocation of cash lump sum
CIBC 2% - 7% Unlimited Lump Sum: 10%
Monthly: 100%
Full repayment of cash back amount
RBC Royal Bank 4-7% $20,000 Lump Sum: 10%
Monthly: 100%
Allocation of cash lump sum
Scotiabank Scotiabank does not offer a cash back mortgage.
ING ING does not offer a cash back mortgage.
BMO BMO does not offer a cash back mortgage.

Reasons to consider a cash back mortgage

The cash requirement to purchase a home can be overwhelming, especially for first-time home buyers. In addition to saving for a down payment of 5% or more, home buyers must cover closing costs, home furnishings, and, in some cases, unaccounted for home renovations and repairs. For some, the assurance of receiving a lump sum returned to them is an attractive option; however, it is important to understand the full cost of a cash back mortgage.

It may even be possible to be loaned a portion of your down payment from immediate family ('traditional sources') and repay the loan upon receipt of the cash back lump sum. However, the Canadian Mortgage and Housing Corporation (CMHC) says it will only insure mortgages with non-repayable monetary gifts from immediate family.


Disadvantages of cash back mortgages

Cash back mortgage rates are higher than standard mortgage rates. You may get cash back now, but know that you will pay an interest rate premium throughout your mortgage term that is likely higher than the lump sum you received at present.

Cash back penalties are incurred if you refinance, port, transfer, or renew your mortgage before maturity, in addition to the regular refinancing penalties. You can compare the penalty amounts across lenders in the chart above. Breaking your mortgage early could cost you the allocation of the cash you received [(years left in term)/(years in term) x lump sum] upwards to full repayment. So, for example, if only 40% of your mortgage term has passed when you break your mortgage, you will have to pay your lender 60% of the cash lump sum.

Cash back mortgages are not available on variable rate mortgage products. You can only obtain a cash back mortgage on mortgages with a fixed rate and a term of three years or more.


A personal decision

Although the interest premium you will pay on a cash back mortgage may be higher than the cash returned to you when you mortgage closes, you may need the funds at present and place an intangible value on immediate access. It is a personal decision that must be made for your unique situation. However, it is important to keep in mind the drawbacks to a cash back mortgage discussed above.


Current Mortgage Rates