Compare the best Big 5 Bank mortgage rates

Getting a mortgage is a major financial commitment and can make big changes to your lifestyle. So, taking the time to choose the right mortgage is really important. For most Canadians, the Big 5 Banks are what they will think of first when they consider taking the mortgage plunge, but the big banks are not your only choice.

Below are some essential details about getting a mortgage from one of the Big 5 Banks, or from any other kind of lender.

Canadian mortgage market update: July 2024

The normally busy spring housing market in Canada was noticeably quiet, as buyers stayed on the sidelines and awaited lower mortgage rates. With the Bank of Canada having carried out a quarter-point policy rate cut on June 5 (the first rate cut since March 2020), many market observers are expecting activity to pick up. 

Variable mortgage rates dropped by roughly the same amount as the policy rate, and, with markets anticipating another rate cut in July, further downward pressure on rates is expected. 

Fixed mortgage rates are tied to the bond market rather than directly to the Bank of Canada and its rate decisions, and in response to the Bank of Canada’s June 5 rate cut (and some economic reports out of Canada and the US), bond yields have fallen to the 3.3% range. This in turn has allowed some lenders to reduce their fixed mortgage rates. 

Still, though, from a historical perspective, both variable and fixed mortgage rates remain elevated. Anyone shopping for a mortgage rate in Canada right now should be aware of the economic factors below.

• Real estate update: On July 12, 2024, Canadian Real Estate Association (CREA) came out with the June 2024 numbers for the Canadian housing market. The latest figures reveal that the housing market experienced a slight bounce in activity in June relative to May, likely fuelled by the Bank of Canada’s June 5 rate cut. The 45,654 properties that changed hands across Canada in June represent a 3.7% increase over May’s figure, but that’s still down by -9.4% on an annual basis. New listings continued to flood into the market, with an increase of 26% from the previous June. With abundant supply and relatively weak demand, the national sales-to-new-listings ratio (SNLR) came in at 53.9%. CREA defines a ratio between 45 - 65% to reflect a balanced housing market, with above and below that threshold indicating sellers’ and buyers’ market conditions, respectively. The month also saw a price decline, with the national average home price in Canada coming in at $696,179 in June 2024, down by -1.6% from the same time last year. 
  
  Read more: Rate cut leads to small June jump for national home sales
  
  
• CPI update: On July 16, 2024, Statistics Canada came out with the latest Consumer Price Index (CPI) reading for the month of June, which revealed that headline inflation stood at 2.7%, down from 2.9% in May’s year-over-year reading. This lower reading can be explained in large part by lower gas prices, which rose on an annual basis by just 0.4% in June, as compared to 5.6% in May. Durable goods also saw a price decline, falling by -1.8%, which then helped to pull down the all-items CPI price. In less welcome news, however, grocery prices rose again for the second month consecutively, up by 2.1% in June (compared to 1.5% in May). Shelter inflation, long a major contributor to the CPI, lowered from 6.4% in May to 6.2% in June, largely due to a -1% drop in mortgage interest costs. This can be attributed to lower mortgage rates in the wake of the Bank of Canada’s June 5th rate cut. Rent costs, which are another component of shelter costs, remained virtually unchanged, lowering by just -0.1% to a still-elevated 8.8%. Two of the Bank’s most closely monitored core inflation measures, CPI Trim and CPI median, rose at a slower pace than in previous months, up by 2.6% and 2.9%, respectively.

Read more: Canadian CPI lowers to 2.7% in June

2024 Housing market forecast

CREA has updated its forecasts for 2024 and 2025 in light of the fact that fewer rate cuts are expected to be implemented by the Bank of Canada than previously, as well as the current abundance of supply and slack demand.

The organization now predicts that some 472,395 homes will change hands across Canada in 2024, up by 6.1% from 2023. This is down from an earlier forecast that saw 492,083 transactions and a 10.5% increase.

In 2025, CREA is forecasting 501,902 home sales, up by 6.2% from the previous year. This has been modified from an earlier projection of 540,494 home sales and a 7.8% increase.

Finally, the national average home price in Canada is predicted to rise by a total of 2.5% in 2024 to reach $694,393, before rising by a further 5% in 2025 to reach $729,319. CREA had earlier projected growth of 4.9% in 2024 to reach $710,120, followed by 7% growth in 2025 to reach $760,120.

Posted rates vs. best rates

When comparing bank mortgage rates, it’s important to know that these rates represent the banks' posted mortgage rates. The posted rate is simply the rate that the bank is advertising in public. However, banks are often able to offer even lower rates in order to secure a borrower's business. You may be able to access these discounted rates through negotiation, or by reaching out to a representative mortgage broker. Some banks offer rates several percentage points below what is posted, so it's worth taking the time to see if you can get a better offer.

Bank rates vs. broker rates

As you may have noticed, bank mortgage rates are almost always higher than those of mortgage brokers. That is because mortgage brokers have access to rates from multiple banks and credit unions, as well as insurance and trust companies. That means they can shop around for you. Brokers also receive bulk discounts from lenders based on the high volume of their business that they can pass along to you.

As a result, it’s unlikely that a bank will post a lower rate than a mortgage broker. However, if you present the lowest market rate to your bank as part of the negotiation process, they may offer to match it. That said, we don’t recommend pitting the banks and brokers against each other to compete for your business. What we do recommend is comparing broker mortgage rates and bank mortgage rates alongside each other, and deciding which offer is best for you.

Comparing mortgage rates with Ratehub.ca

Whether you're considering using a bank or broker, a variable or fixed mortgage rate, or a one to a 10-year term, we can help. Our tools find the best mortgage rates for every category and type of lender, personalized to you. Our goal at Ratehub.ca is to give Canadians the best mortgage experience from online search to close. This means offering Canadians the mortgage tools, information and articles to educate themselves, allowing them to get personalized rate quotes from multiple lenders to compare rates instantly and providing them with the best online application and offline customer service to close their mortgage all in one place. 

Posted rates vs. best rates

When comparing bank mortgage rates, it’s important to know that these rates represent the banks' posted mortgage rates. The posted rate is simply the rate that the bank is advertising in public. However, banks are often able to offer even lower rates in order to secure a borrower's business. You may be able to access these discounted rates through negotiation, or by reaching out to a representative mortgage broker. Some banks offer rates several percentage points below what is posted, so it's worth taking the time to see if you can get a better offer.

Bank rates vs. broker rates

As you may have noticed, bank mortgage rates are almost always higher than those of mortgage brokers. That is because mortgage brokers have access to rates from multiple banks and credit unions, as well as insurance and trust companies. That means they can shop around for you. Brokers also receive bulk discounts from lenders based on the high volume of their business that they can pass along to you.

As a result, it’s unlikely that a bank will post a lower rate than a mortgage broker. However, if you present the lowest market rate to your bank as part of the negotiation process, they may offer to match it. That said, we don’t recommend pitting the banks and brokers against each other to compete for your business. What we do recommend is comparing broker mortgage rates and bank mortgage rates alongside each other, and deciding which offer is best for you.

Comparing mortgage rates with Ratehub.ca

Whether you're considering using a bank or broker, a variable or fixed mortgage rate, or a one to a 10-year term, we can help. Our tools find the best mortgage rates for every category and type of lender, personalized to you. Our goal at Ratehub.ca is to give Canadians the best mortgage experience from online search to close. This means offering Canadians the mortgage tools, information and articles to educate themselves, allowing them to get personalized rate quotes from multiple lenders to compare rates instantly and providing them with the best online application and offline customer service to close their mortgage all in one place.