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Find the best 3-year variable mortgage rate

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3-year variable mortgage rates

Rates updated:

Toronto, ON

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mortgage rates for

buying a home
5 yearFixed

CanWise Financial

4,228 reviews

CanWise Financial

5 yearFixed


5 yearFixed

Meridian Credit Union

5 yearFixed

First National

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3-year variable mortgage rates: Frequently asked questions

What are 3-year mortgage terms?

What are variable rates?

Are 3-year mortgages better than other terms?

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A guide to 3-year variable mortgage rates

Mortgages in Canada come in all shapes and sizes - just like Canadians! While that's great for potential homeowners, it can also make comparing mortgages confusing. Our goal is to make it simple to compare mortgage rates, terms, and conditions, to empower you to make the best choice. Read on to learn more about 3-year variable-rate mortgages, one of the more flexible options in the mortgage market. 

3-year variable mortgage rates: Quick facts

3-year variable mortgage rate explained

A 3-year variable mortgage rate is simply a variable mortgage rate that you commit to for a 3 year period. Being a short term with a variable rate, it is one of the more flexible mortgage products in Canada.

Variable mortgage rates - sometimes referred to as adjustable mortgage rates - follow changes in the prime lending rate. The prime rate is the standard rate at which banks lend to creditworthy customers. Variable mortgage rates are typically stated as a discount or premium (+/-) to prime. For instance, if the prime lending rate is 3% and your variable mortgage rate is prime plus 0.5%, your effective rate will be 3.5%. As the prime rate changes, your effective rate will change too.

A 3-year variable mortgage rate commits you to this arrangement for a term of three years. For those three years, your rate will stay locked to prime by the agreed upon amount, and you'll be committed to the other contractual provisions with your lender.

Generally, variable rates are lower than fixed mortgage rates of the same term. This is because fixed rates buy you protection against interest rate instability. Conversely, variable rates are riskier than fixed rates, so there are pros and cons.

Comparing 3-year variable mortgage rates

Variable mortgage rates expose you to changes in interest rates and, thus, in your mortgage payments. If market rates fluctuate, you will be charged the difference in interest applied to your mortgage principal. Further, if your mortgage payments are structured so you pay a fixed amount every month – with rate changes altering the interest and principal portions – then your mortgage payment schedule may also be affected.

On the other hand, variable mortgage rates have proven to be less expensive compared to fixed rates when examined historically, and they particularly make sense in falling interest rate environments.

The 3-year term is sensible if you foresee breaking your mortgage within a few years – if you were planning to upgrade your home, for instance. Opting for a 3-year term over, say, a 5-year term could save you a considerable amount in penalty costs.

Another point to consider is a variable rate’s relationship to prime: if you believe discounts to prime will become more favourable in the future, committing to a 3-year over a 5-year mortgage rate is also a sound strategy.

The popularity of the 3-year variable mortgage rates

Around 20% of Canadians have mortgage terms between two and four years, with younger age groups supporting a slightly higher figure. Compared to older demographics which tend to be more risk-averse, younger demographics have less need to lock in rates for longer periods.

Variable rates, at 29% of all mortgages, are not as popular as fixed mortgage rates in Canada, due to the uncertainty associated with fluctuating interest rates.

What drives changes in 3-year variable mortgage rates?

The Bank of Canada plays a key role in determining variable mortgage rates. The Bank of Canada sets the overnight rate, which is the base for lenders’ prime rates.

Variable mortgage rates, as you know, are quoted by lenders in terms of their relationship to the prime rate.

The premium or discount a lender applies to prime in calculating a variable mortgage rate is based on independent marketing strategy and general credit market conditions.

Author bio

Jamie David

Jamie David is the Business Director of Mortgages at A graduate of the Systems Design Engineering program at the University of Waterloo, she has over 15 years of business, marketing, and engineering experience in the financial technology, banking, education, energy and retail industries. She has worked in top organizations like TD Bank, Trading Pursuits, Petro-Canada, and the TTC. Her passion for personal finance, investing, education, and business strategy brought her to where she heads a very talented, cross-functional team that is dedicated to providing Canadians with the best mortgage experience all the way through from online search to (keys-in-your-hand) funded mortgage.

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How are CanWise Financial and connected?

Both and CanWise Financial are owned and operated by Ratehub Inc. When comparing mortgage rates on, you’ll see rates from a number of lenders and mortgage brokers, including CanWise Financial. All products are sorted according to the rates available to you and the selection criteria you’ve shared with us.

We’re happy to send users to CanWise because of their great rates, trusted advice, and experienced mortgage team. Read any of their 3,300 five-star Google and Facebook reviews and you’ll see what we mean.