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Find the best 5-year fixed mortgage rate

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5-year fixed mortgage rates

Rates updated:

Toronto, ON
×

These are the best

5-year
fixed

mortgage rates for

buying a home
RateTermTypeProvider
Featured1.69%
5 yearFixed

CanWise Financial

4,228 reviews

CanWise Financial

Featured1.84%
5 yearFixed

Duca

Featured1.89%
5 yearFixed

Meridian Credit Union

Featured1.89%
5 yearFixed

First National

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FAQS

5-year fixed rates: Frequently asked questions

What are 5-year fixed mortgage rates?

How much can I save comparing 5-year fixed rates?

Why compare 5-year fixed rates with Ratehub.ca?

Why are fixed rates different to variable rates?

Are 5-year mortgages better than other mortgage terms?

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A guide to 5-year fixed mortgage rates

5-year fixed-rate mortgages are the most common type of mortgage in Canada, so it’s important to understand how to find the best possible rate. Ratehub.ca makes it easy to compare rates from the biggest banks, brokers, and other mortgage providers in Canada, at no cost to you.

Read on to learn more about comparing 5-year fixed rates, or use the tools at the top of this page to find out what rate you could be eligible for in less than a few minutes.

Best 5-year fixed mortgage rates +

5-year fixed mortgage rates: Quick facts

Historical 5-year fixed mortgage rates

Looking over historical mortgage rates is the best way to understand which mortgage terms attract lower rates. They also make it easier to understand whether rates are currently higher or lower than they have been in the past.

Here are the lowest 5-year fixed rates in Canada for the last several years, compared to several other types of mortgage rates.

2016 2017 2018 2019
5-year fixed 2.09% 2.24% 2.79% 2.29%
5-year variable 1.92% 1.69% 1.85% 2.36%
1-year fixed 1.94% 1.99% 2.69% 2.49%
3-year variable 2.10% 2.10% 1.99% 2.89%
Prime Rate 2.70% 2.70% 3.20% 3.95%

Source: Ratehub Historical Rate Chart

 

The popularity of 5-year fixed mortgage rates

A 5-year mortgage term, at 66% of all mortgages, is by far the most common duration. It sits right in the middle of available mortgage term lengths, between one and 10 years. Its popularity reflects a risk-neutral average.

A further breakdown of mortgage terms shows that:

  • 8% of mortgages have terms exceeding five years,
  • 26% of mortgages have terms of less than five years,
  • 6% of terms are one year or less, and
  • 20% of mortgages terms are between one and four years.

Fixed rates are also more common than variable rates, representing 74% of all mortgages. In terms of age dispersion, fixed-rate mortgages are slightly more common for the youngest age groups, while older age groups are more likely to choose variable-rate mortgages.

(Source: CAAMP)

What drives changes in 5-year fixed mortgage rates?

By and large, 5-year fixed mortgage rates follow the pattern of 5-year Canada bond yields. Bond yields are driven by economic factors such as unemployment, export, and inflation.

When Canada bond yields rise, sourcing capital to fund mortgages becomes more costly for mortgage lenders and their profit is reduced unless they raise mortgage rates. The reverse is true when market conditions are good.

In terms of the spread between the mortgage rates and the bond yields, mortgage lenders set this based on their desired market share, competition, marketing strategy, and general credit market conditions.

5-year fixed rates vs. 5-year bond yields

From 2000 - 2020

5 year fixed mortgage rates vs bond yields

The bottom line: Should you get a 5-year fixed mortgage rate?

The 5-year fixed-rate mortgage is a good compromise between cost, flexibility, and stability. As such, it's a good fit for many borrowers. As long as you're happy locking in today's rate for the next 5 years, a 5-year fixed-rate mortgage could be a good choice.

You will, however, want to be confident that you won't want to refinance your mortgage or sell your home in the next 5 years. Fixed-rate mortgages can be very expensive to break, because of the way that prepayment penalties are calculated. So, it's quite important to avoid breaking your mortgage at all costs! If you need more flexibility, it might be a good idea to consider a variable rate or an open mortgage instead.

If you're still not completely sure what the best choice is for you, it could be worth speaking to a licensed mortgage broker. Broker consultations are free and will give you the expert advice you need to make the right decision. A broker may also be able to find you a better mortgage rate when you're ready. 

Author bio

Jamie David

Jamie David is the Business Director of Mortgages at Ratehub.ca. 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 Ratehub.ca 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.

About Ratehub

We help you find better financial products for your specific needs. Whether you need a mortgage, credit card, savings account, or insurance coverage, we get you the information you need to choose better.

How does Ratehub.ca make money?

Financial institutions pay us for connecting them with customers. This could be through advertisements, or when someone applies or is approved for a product. However, not all products we list are tied to compensation for us. Our industry leading education centres and calculators are available 24/7, free of charge, and with no obligation to purchase. To learn more, visit our About us page.

How are CanWise Financial and Ratehub.ca connected?

Both Ratehub.ca and CanWise Financial are owned and operated by Ratehub Inc. When comparing mortgage rates on Ratehub.ca, 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.