Find the best 5-year fixed mortgage rate

Q: How much did fixed rates increase in 2022?

On January 1, 2022 the best high-ratio, 5-year fixed rate in Canada was 2.34%. As of January 1, 2023, the best high-ratio, 5-year fixed rate in Canada was 4.54%. Over the course of 2022, fixed mortgage rates in Canada went up a total of 2.20%, which represents an increase of nearly 100%.

Get a personalized rate in under 2 mins

5-year fixed mortgage rates in Canada

Ratehub.ca Insights: Bond yields are stabilizing above 3% as markets are reassured in the stability of the global banking system, but there is no upward pressure expected for fixed rates in the short term. Variable mortgage rates remain unchanged.

Transaction type

Purchase price

Down payment $

Additional filters

Rate type

Rate term

Location

Amortization

Occupancy

Payment frequency

Rate	Provider	Payment
Featured	Canadian Lender	^$0
Featured	Meridian Credit Union	^$0
Featured	Alterna Savings	^$0
Featured	Equitable Bank	^$0
Featured	CanWise A Ratehub Company	^$0
Featured	ICICI Bank Canada	^$0
Featured	CMLS Financial	^$0
Featured	RBC Royal Bank	^$0
Featured	Bank of Montreal	^$0
Featured	First National	^$0
Featured	CIBC	^$0
Featured	MCAP	^$0
Featured	Big 6 Bank	^$0
Featured	TD Bank	^$0
Featured	Desjardins	^$0
Featured	Scotiabank	^$0
Featured	Tangerine	^$0
Featured	motusbank	^$0
	Laurentian Bank	^$0
	HSBC	^$0
	Simplii Financial ™	^$0
	National Bank	^$0

see which rates I qualify for

WATCH: March 8, 2023 Bank of Canada Announcement

compare today's best rates

5-year fixed rates: Frequently asked questions

How much did fixed rates increase in 2022?

Why did fixed rates go up so much in 2022?

5-year bond yields directly affect 5-year fixed mortgage rates. When bond yields go up, the cost to lend money to borrowers increases and consequently, lenders raise their mortgage rates to compensate.

Throughout 2022, bond yields rose steadily, in response to economic conditions such as strong labour numbers and high inflation. This in turn put upward pressure on fixed mortgage rates over the course of the year.

Will fixed rates continue to go up in 2023?

There has been considerable volatility in the bond market so far in 2023, as it reacts to mixed economic data; for example, yields actually trended lower in the final weeks of 2022 below the 3% mark, leading to a brief period where lenders discounted their rates.

This quickly reversed, however, once additional inflation data indicated the measure would remain higher than central banks anticipated. The Bank of Canada has indicated in its March 8 announcement that it will hold its Overnight Lending Rate for the foreseeable future, and, coupled with cooling inflation, this may lead to stabilization in the bond market. However, it remains unpredictable due to external factors, in particular the current instability in the American banking sector. After the recent collapse of Silicon Valley Bank and several other American and international lenders, bond yields plunged before stabilizing, albeit at levels lower than what they were a year ago. This has given lenders the ability to lower fixed rates in the last few days, but it remains to be seen whether this trend will persist.

I’m in a variable-rate mortgage. Should I lock-in a fixed-rate?

Since you can’t go back in time and get the fixed rate you were offered at the beginning of your mortgage, the decision becomes more complicated. That’s because fixed mortgage rates price in the expectation of where variable mortgage rates will go throughout your term.

You may be thinking about locking in a fixed rate because the prime rate was increasing throughout 2022 and your variable rate is now moving higher and higher. However, it’s important to note that fixed rates have been increasing significantly as well. Therefore, you have to make the variable vs. fixed decision in the current rate environment and your decision should come down to your appetite for risk and your household finances.

The Bank of Canada has indicated that it will hold its Overnight Lending Rate at 4.5% for the foreseeable future, assuming inflation does not trend any higher.

Before switching your mortgage, the main thing to consider is the spread between your current variable rate and the best fixed or variable rate you can get today.

If the spread between your current rate and the best rate you can get today is greater than the amount by which you believe the prime rate will increase for the rest of your mortgage term, then you may end up saving more by keeping your current variable rate.

If the discount to prime of the best variable rate you can get today is bigger than your current variable rate, then switching to a new variable rate may afford you more savings and provide a greater cushion against further rate increases.

If you believe that you can save more money by breaking your current variable rate, make sure to account for the cost of breaking your mortgage. You can use Ratehub’s penalty calculator to help you estimate this cost.

Lastly, if your biggest concern is the change to your monthly mortgage payments, there are some lenders who offer variable rates with “fixed” mortgage payments that do not change during the term. In such cases, when prime goes up, your monthly payment remains the same but the percentage of your payment that goes towards your principal decreases. This means that more of your payment goes towards paying the increased interest and ultimately it may take you longer to pay back your mortgage amount in full.

What impact do rising fixed rates have on the stress test?

With mortgage rates at historic highs, the mortgage stress test threshold continues to be a formidable one.

Mortgages are currently stress tested based on the higher of:

the qualifying rate (currently 5.25%), or
your contract rate + 2%

As of March 29, 2023, the lowest available high ratio 5-year fixed rates are at 4.44%, while the lowest variable rate available is 5.55%. Therefore, whether you have a fixed-rate or variable-rate mortgage, the stress test used is the contract rate + 2% (as that will always be higher than 5.25%).

What is Canadian Lender and Big 6 Bank?

On our rate comparison tables, Ratehub.ca features generic brands like “Canadian Lender”. The “Canadian Lender” rate represents the lowest rate our brokerage can offer among the different lenders we work with. This means that this rate can be from a Big Bank, trust company, or lending company. The reason we do not advertise the rate under the name of the actual lender offering it, is because the rate is only available through our brokerage, via a special volume discount or promotion.

Similarly, “Big 6 Bank” is another generic provider that is used to advertise the lowest Big Bank rate that the Ratehub.ca brokerage can offer.

5-year fixed rates vs. 5-year variable rates

From 2007 - Today

Not sure where to start? Let us help get you started

I'm looking to buy

I'm renewing / refinancing

Check out our tools to get started

Payment calculator
See how much your payments could be if you make weekly, bi-weekly or monthly payments.
Affordability calculator
Get a sense of how much you can afford to borrow and what makes sense for you.
Land transfer tax calculator
Calculate the amount you will have to pay in land transfer tax depending on your location.
CMHC insurance calculator
Determine how much your CMHC insurance will be based on the percentage of your down payment.

A guide to 5-year fixed mortgage rates

Jamie David, Sr. Director of Marketing and Mortgages

March 29, 2023

March 8, 2023 Bank of Canada Announcement Update:

On March 8, 2023, the Bank of Canada held the target for the overnight rate at 4.50%.
Canadians with fixed-rate mortgages aren’t immediately affected by the Bank of Canada’s decision to hold the Overnight Lending Rate, but can expect any new stability to be reflected in their own rate options when they renew at the end of their current mortgage terms.
Five-year bond yields have trended higher in recent weeks, pushing the lowest 5-year fixed mortgage rates up to 4.69%. It's possible that today's announcement will have a calming effect on bond yields, but they remain unpredictable due to a variety of external factors such as economic conditions in the United States.
The Bank expressed its belief that inflation is continuing to move in the right direction. So long as this trend persists, it is reasonable to expect that rate hikes will be over for the remainder of 2023.
This was the Bank of Canada’s first rate hold since March 2022; during that time frame, eight successive rate hikes pushed the target for the Overnight Rate from 0.25% to 4.50%, an increase of 425 basis points.

5-year fixed mortgage rates are the most popular type and term combination in Canada, so it’s usually the first place people start when researching mortgage rates. Ratehub.ca makes it easy to find the lowest 5-year fixed mortgage rates, as we bring rates from the big banks, lenders and credit unions all to one place at no cost to you.

Best 5-year fixed mortgage rates

Rate	Term	Type	Provider
4.44%	5 years	Fixed	Canadian Lender
4.59%	5 years	Fixed	Meridian Credit Union
4.59%	5 years	Fixed	Alterna Savings
4.64%	5 years	Fixed	Equitable Bank
4.69%	5 years	Fixed	CanWise

5-year fixed mortgage rates: Quick facts

65%

Just under two-thirds of all mortgage requests made on Ratehub.ca in 2022 were for 5-year fixed mortgages

72%

72% of Canadians had fixed mortgage rates in 2020 (Source: Mortgage Professionals Canada)

Mortgage rate is fixed over a 5-year term
5-year mortgage rates are driven by 5-year government bond yields

What makes a 5-year fixed-rate mortgage right for me?

Generally, a fixed-rate mortgage is a good choice if you are risk-averse and don’t want to deal with the stress that could come with a variable rate if the prime rate goes up over time and your mortgage payment increases. Before committing to a 5-year mortgage, you need to think about your personal situation today and going forward. If you are likely to move, change jobs, or otherwise embark on any life changes that may affect your ability or desire to remain in the home you are purchasing, you need to take this into account when selecting the mortgage that’s right for you.

Full feature mortgages vs. restricted mortgages

While it’s always desirable to obtain the best mortgage rate, in today’s rising rate environment, the quest to find the lowest rate seems more important than ever. It also means that one needs to be vigilant about choosing the right mortgage for your needs. The lowest rate that you see advertised may not be what you want, because it could well be for a restricted mortgage. Although the low rates of a restricted mortgage may catch your eye, it’s important to understand the drawbacks. A full feature mortgage will have a higher interest rate, but it will also have a number of features that make it very desirable, including:

Pre-payment options: Take a look at what pre-payment options your lender is willing to offer you. The more flexible your lender is with pre-payment options, the faster you can potentially pay off your loan, which could save you thousands of dollars in interest fees. The main pre-payment options are monthly pre-payment and lump sum pre-payment. In the case of the former, you’re allowed to increase your monthly payment up to a certain percentage determined by your lender, maxing out at 100%. If you had a lender who was flexible enough to allow you to double your monthly payments, for example, you could in theory pay your mortgage off in half the time if you were able to do so. The latter option, lump sum pre-payment, allows you to pay off up to say, 25% of your mortgage loan, again, depending on your lender.
Porting your mortgage: If you need to sell your home before the end of your mortgage term, many lenders will allow you to port your mortgage. Porting a mortgage means to take your current mortgage with its existing rates and terms and transfer it to another property, and allows you to avoid breaking your mortgage. You’ll want to talk to your lender about how portable your mortgage is, particularly if you think you may need to move before your term is up. Not all mortgages are portable, and many that are portable have conditions attached that you should be aware of.
Lump sum pre-payment privileges: You are allowed to make multiple lump sum pre-payments to bring down your mortgage balance in a given calendar year. Most lenders will cap the amount of pre-payments you can make, e.g. you cannot pay more than 20% of your principal in a single year.
Payment flexibility: If you choose to increase the size of your regular mortgage payments, you are able to do so without incurring any penalties or fees.

These are just some of the most common features you’ll find in a full feature mortgage that make them so convenient for homebuyers. To learn more about the mortgage that’s right for you, it’s always a good idea to speak with a mortgage broker. They can give you personalized, expert advice at no cost to you.

What are some of the pros and cons of a 5-year fixed mortgage?

There are pros and cons to choosing a 5-year fixed mortgage rate, and we’ll walk you through each below. Some of the pros of a 5-year fixed mortgage are:

Risk protection: For buyers who are risk-averse; a fixed rate mortgage enables you to “set it and forget it” - your rate, and therefore mortgage payment, is locked in and will not fluctuate with changes in bond yields. This allows you to budget with greater accuracy and offers you stability for the duration of your term. Moreover, in recent years, Canadians have enjoyed access to some of the best fixed rates available in decades, although fixed rates have started to climb again since October of 2021.
Competitive rates: The 5-year term is historically the most popular option, and the one that lenders often encourage you to opt for. The length of this term is a good “middle of the road” choice for home buyers. Because it’s such a competitive, popular rate term, lenders often get the most aggressive when pricing these terms.

On the flip side, there are some cons to consider as well.

Higher rates: In order to guarantee your fixed rate, your lender will charge you a premium. According to York University Professor Moshe Milevsky’s landmark 2001 study, historically, over 90% of Canadians who have maintained a variable mortgage rate throughout their entire mortgage term have paid less in interest than those who have stuck to a fixed rate.
Breakage penalties: While the 5-year term can offer you peace of mind, in the event that something such as a move, loss of a job, illness or divorce forces you to break your mortgage, you could be on the hook for a hefty break penalty. With a fixed mortgage rate, your penalty will be the greater of the interest rate differential (IRD) or three months’ interest. Oftentimes, the IRD penalty can be large, and thus a fixed rate mortgage can be expensive to break. If you have a variable rate mortgage, on the other hand, the penalty will always be three months’ interest, and it can therefore be less costly to break your mortgage. For a more detailed explanation of IRD and how it is calculated, you can refer to our Mortgage Refinance Calculator page. You can also use our Mortgage Penalty Calculator to estimate how much you might have to pay in the event that you have to break your mortgage.

See today's best mortgage rates

Compare current mortgage rates across the Big 5 Banks & top Canadian lenders. Take 2 minutes to answer a few questions and discover the lowest rates available to you.

4.44%

Best fixed rate in Canada

see my rates

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 (high-ratio, insured) 5-year fixed rates of the year in Canada for the last several years, compared to several other types of mortgage rates.

Source: Ratehub Historical Rate Chart

The popularity of 5-year fixed mortgage rates

A 5-year mortgage term is the most popular duration. It sits right in the middle of available mortgage term lengths, between one and 10 years, and, thus, its popularity reflects a risk-neutral average. It also tends to be heavily promoted by major lenders. A further breakdown of mortgage terms shows that about 80% of mortgages have terms of five years or less.

Fixed rates are by far the most common, representing 69% of total mortgages, and nearly 56% of new and mortgages in 2022. In terms of age dispersion, fixed rate mortgages are slightly more common for the youngest age groups, and older age groups are more likely to choose variable rate mortgages.

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, plus a spread. 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.

References and Notes

For more information, check out these helpful pages

Ratehub.ca education centre

Buying
So you've made the decision to buy a new home! The first step is to figure out how much you can afford to spend.
read more
Renewing
If your current mortgage is up within four months, now's the time when most lenders will allow you to start the early mortgage renewal process.
read more
Refinancing
When deciding whether or not you should refinance your current mortgage and replace it with a new one, there are a few important things to consider.
read more