As of March 9, 2023, the best high-ratio, 5-year variable rate in Canada was 5.55%. To see today's rates, visit our rate table to see the 5-year variable mortgage rates offered by Canada’s Big Banks and top lenders.

To get a personalized mortgage quote, click here and enter some basic information (i.e. down payment amount, purchase price, location) so we can give you a more accurate quote within 2 minutes. 

On January 1, 2022 the best high-ratio, 5-year variable rate in Canada was 0.85%. As of January 1, 2023, the best high-ratio, 5-year variable rate in Canada was 5.30%. 

Over the course of 2022, variable mortgage rates in Canada went up a total of 4.45%, which represents an increase of over 520%.

Variable rates are directly tied to a lender’s prime rate. Lenders set their prime rates based on the Bank of Canada’s target for the overnight rate (also known as the policy or benchmark interest rate in Canada).

In March 2020, the Bank of Canada slashed the target for the overnight rate multiple times in response to the COVID-19 pandemic. It maintained the policy interest rate at the lower bound of 0.25% until March 2, 2022 - a historic low. 

Between March 2, 2022, and January 25, 2023, the Bank of Canada  increased the target for the overnight rate a historic total of eight times in an effort to combat rising inflation. As a result, the prime rates of most lenders also increased. 

Because variable rates are actually calculated as a discount from the prime rate, as prime rates rose in 2022, so did variable rates. 

You may be thinking about locking in a fixed rate because the prime rate increased throughout 2022 and your variable rate has moved higher. However, it’s important to note that fixed rates have been increasing significantly as well. Therefore, you have to choose between a variable or fixed rate based on 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 4.50% 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.

As mortgage rates continue to rise, the mortgage stress test will continue to go up as well. 

Mortgages in Canada are currently stress tested based on the higher of: 

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

As of March 9, 2023, the lowest 5-year variable rate available in Canada is 5.55% and the lowest 5-year fixed rate in Canada is 4.69%. As such, both variable rates and fixed rates are now stress tested using your contract rate +2% as this will always end up being higher than the current qualifying rate of 5.25%.

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.

On March 8, 2023, the Bank of Canada held the target for the overnight lending rate for the first time since it began its rate hiking cycle back in March 2022. The benchmark cost of borrowing remains at 4.50%. That’s still the highest this rate has been since 2007, but borrowers can breathe a sigh of relief that rates have not climbed further. 

The Bank expressed optimism in its most recent announcement that it believes core inflation in Canada has peaked and is now declining in response to the aggressive measures it took over most of 2022 and into January 2023, and that it will now hold rates into the foreseeable future, as long as economic factors evolve as expected. This means variable mortgage borrowers can anticipate interest rates to stabilize for the remainder of 2023, as long as inflation continues to trend downward.