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.

Breaking news: Canadian mortgage reform update

On September 16, 2024, the federal government announced sweeping changes to mortgage qualification rules for first-time home buyers, as well as those purchasing newly-constructed homes.

As of December 15, 2024:

• 30-year amortizations will be available for all first-time home buyers, regardless of whether they have an insured mortgage. These extended amortizations are also available for any purchase of new construction.
  
  
• The maximum purchase price for an insured mortgage (where less than 20% down is paid) will be increased to $1.5 million, from the current $1 million.
  

These are some of the most impactful mortgage reforms announced since 2012, and are anticipated to increase first-time home buyers’ affordability and access to the housing market. 

Learn more about these new mortgage rule changes on the Ratehub.ca blog

Canadian mortgage market update: September 2024

The normally busy summer 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 third quarter-point policy rate cut on September 4 (the first two rate cuts since March 2020 having been implemented on June 5 and July 24), 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 October, 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 September 4 rate cut (and some economic reports out of Canada and the US), bond yields have fallen to the 2.7% 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 September 16, 2024, the Canadian Real Estate Association (CREA) came out with the August 2024 numbers for the Canadian housing market. The latest figures reveal that the housing market was relatively slow throughout the month of August, as buyers hold off in anticipation of lower rates now that the Bank of Canada is in a rate cutting cycle. The 39,573 residential properties that changed hands across Canada in August represent a slight increase of 1.3% from July, but that’s still down by -2.1% on an annual basis. New listings continued to flood into the market, with an increase of 18.8% from the previous August. With abundant supply and relatively weak demand, the national sales-to-new-listings ratio (SNLR) came in at 53% in August, roughly the same as 52.7% the previous month. 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 $649,100, a minuscule increase of 0.1% from the same time last year and below July’s national average home price of $663,317.
  
  Read more: Canadian real estate remained in “holding pattern” in August 

 

• CPI Update: On September 17, 2024, Statistics Canada released the August Consumer Price Index (CPI) report, revealing that the headline measure fell to 2%, down from 2.5% in July and slightly under the forecasted 2.1%. The Bank of Canada has been striving towards this number — considered a sustainable level for inflation that neither stimulates nor restricts the economy — ever since the end of pandemic lockdowns saw inflation surge to a peak of 8.1% in June 2022. The “core” measures that are tracked closely by the Bank of Canada also came in at a 40-month low: the CPI Trim, which filters out extreme price movements that can be caused by specific items in the basket of goods, dropped for the fourth consecutive month, down to 2.4% from July’s 2.7%. Mortgage interest costs have fallen for the 12th month in a row to 18.8%, down from a peak of 30.9% in August 2023. Despite rents remaining elevated at 8.9%, the earlier rate cuts by the Bank of Canada in June and July have brought overall shelter inflation down to 5.3%.
  
  Also read: Canadian CPI lowers to 2% in August

 

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.