Find the best 5-year variable mortgage rate

Get your personalized mortgage quote in under 2mins

5-year variable mortgage rates in Canada

To see mortgage rates for other terms and types, click on the filters icon beside down payment percentage.

Ratehub.ca Insights: Bond yields remain elevated in the 3.7% range, prompting some lenders to hike their fixed mortgage rates. Getting a pre-approval is recommended when shopping to lock in a rate for up to 120 days. Variable rates are stable.

Transaction type

Rate type

Purchase price

Down payment $

Rate term

Amortization

Occupancy

Payment frequency

Rate	Provider	Payment
	Canadian Lender	^$2,517
	Canwise A Ratehub Company	^$2,552
	CMLS Financial	^$2,588
	First National	^$2,599
	Equitable Bank	^$2,599
	Bank of Montreal	^$2,635
	MCAP	^$2,647
	RBC Royal Bank	^$2,669
	TD Bank	^$2,671
	CIBC	^$2,671
	Big 6 Bank	^$2,683
	Scotiabank	^$2,683
	Desjardins	^$2,707
	Alterna Savings	^$2,732
	Meridian Credit Union	^$2,732
	ICICI Bank Canada	^$2,817
	motusbank	^$2,829
	Tangerine	^$2,719
	Simplii Financial ™	^$2,756
	National Bank	^$2,827

see which rates I qualify for

WATCH: April 10, 2024 Bank of Canada announcement

compare today's best rates

5-year variable rates: Frequently asked questions

What is the best 5-year variable mortgage rate in Canada?

As of April 19, 2024, the best high-ratio, 5-year variable rate in Canada was 5.95%. 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 on the preceding link 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.

Why did variable rates go up so much in 2022 and 2023?

Variable mortgage rates are directly correlated with the Overnight Lending Rate set by the Bank of Canada, which in turn sets the benchmark for the Prime rate in Canada. The latter is then used by consumer lenders when setting the pricing of their variable mortgage rates.

The Overnight Lending Rate was increased aggressively by the BoC over the last two years; the central bank increased this target rate seven times in 2022, and an additional three times in 2023, bringing the total to a historic 10 rate hikes – the steepest monetary policy tightening cycle in Canada’s history. In all, the increases brought the BoC’s rate from its pandemic-era low of 0.25%, to 5%, where it remains today. As a result, Canada’s prime rate is currently 7.2%.

As variable mortgage rates are calculated as a discount from the prime rate, lenders responded to these increases by raising variable mortgage rates in kind; according to Ratehub.ca’s historical rate database, the lowest five-year variable mortgage rate available in 2022 was 0.89%. In sharp contrast, that has increased to 5.95% as of early 2024.

These rate hikes were in response to rampant inflation growth, which soared to a 40-year high of 8.1% in June 2022. This was mainly due to price increases as a result of the supply-chain challenges that had built up during the pandemic, as well as renewed consumer demand for dining, travel, and other services. The latest inflation report from Statistics Canada indicates inflation growth came in at 3.1% in November – promising progress, but still higher than the 2% target range desired by the BoC.

Will variable mortgage rates go down in 2024?

Variable mortgage borrowers will be relieved to hear that lower mortgage rates may be on the horizon, albeit more distantly than they might have hoped. While it’s impossible to predict rate direction with certainty, the Bank of Canada has indicated in its last several rate announcements that its rate hiking cycle is almost certainly over. Now, the question is when the Bank might decide to reduce its target for the overnight rate.

In commentary released on April 10, 2024, the Bank’s Governing Council wrote that key economic indicators, including a stalled economy and softening labour market conditions, justified holding the target for the overnight rate at 5%. However, it also noted that February’s lower-than-expected inflation reading of 2.8% was still above its 2% target, and concluded that rates needed to stay higher for longer in order to achieve its goal of tamping down inflation. While this doesn’t mean that there won’t be a rate cut in 2024, it is highly unlikely that we will see one before the latter half of the year.

As long as current trends persist, it’s likely the central bank will begin to cut rates towards the end of 2024 and into 2025, perhaps by as much as 200 basis points, spread over five to six rate cuts. Should that materialize, Canada’s prime rate and lenders’ variable mortgage rates will be cut in response.

Should I switch my variable-rate mortgage to a fixed-rate mortgage if the prime rate increases?

You may be thinking about locking in a fixed rate because the prime rate increased throughout 2022 and 2023, 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 held its target for the overnight rate at 5% for the sixth consecutive time at its last announcement on April 10, citing a stalled economy and slackening labour market conditions as its primary reasons for doing so. However, in its accompanying commentary, the Bank reaffirmed its resolve to tamp inflation down to its 2% target, and indicated that rates needed to stay higher for longer in order to have their full intended effect.

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.

Read: Should you switch from a variable-rate to a fixed-rate mortgage?

Read: Think mortgage rates will drop? The argument for getting a variable rate now

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. That said, you should be aware that these types of mortgages are subject to hitting what is known as the trigger rate, wherein your payments are no longer going to the principal, and may not even be covering the costs of interest in full. Once this happens, you go into what’s called ‘negative amortization’, where you are actually losing equity that you’ve built up in your home. This can lead to you reaching your trigger point, where your payments are so much less than even the cost of interest on your mortgage loan that you need to increase them. Trigger points vary from lender to lender, and are spelled out in your mortgage contract.

Is it worth getting a variable-rate mortgage?

Whether or not a variable-rate mortgage is right for you depends on your risk tolerance as a borrower. Because variable-rate borrowing product rates are determined as either a plus or minus from the Prime rate, they fluctuate whenever the Bank of Canada makes a change to its trend-setting Overnight Lending Rate. This means it’s possible that a borrower would see their interest rate and their payment increase over the course of their mortgage term, should the Bank of Canada hike its rate during that time frame. As well, variable borrowers who have a fixed-payment schedule would see less of their payment go toward their principal mortgage loan in this scenario, which could put them at risk of hitting their trigger rate, and their mortgage negatively amortizing.

However, the strong current consensus among investors and market analysts is that the BoC is poised to hold its target rate for the next few months, before eventually cutting it in the latter half of 2024, and throughout 2025. Some forecasts have called for as many as five to six cuts before the BoC is through, totalling 200 basis points. While it’s impossible to know for sure that rate cuts will materialize as expected, borrowers who are willing to absorb the risks associated with variable rates may enjoy lower rates in the near future.

Variable mortgage rate products also offer greater flexibility; unlike fixed-rate mortgages, which incur a hefty interest-rate-differential penalty when broken, a variable-rate mortgage term can be ended before renewal time for just three months’ of interest. Most mortgage lenders can also convert an existing variable rate into a fixed-rate option at the borrower’s request, without penalty.

Also read: Think mortgage rates will drop? The argument for getting a variable rate now

What impact do elevated variable rates have on the stress test?

Variable mortgage rates remain high from a historical perspective, which in turn increases the mortgage stress test threshold borrowers must prove they can pass when qualifying for a mortgage.

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

As of April 17, 2024, the lowest 5-year variable rate available in Canada is 5.95% and the lowest 5-year fixed rate in Canada is 4.79%. 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%. Today’s mortgage stress test starts in the mid-7 - 8% range for many borrowers.

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 variable rates vs. 5-year fixed rates

From 2007 - Today

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 variable mortgage rates

Jamie David, Sr. Director of Marketing and Mortgages

April 17, 2024

April 2024: Mortgage market update

After a bumpy start to 2024 for the Canadian housing market, we are seeing preliminary indicators that sales activity will gather pace, improving as expectations grow for a rate cut from the Bank of Canada as early as the summer. Bond yields continue to be on a roller coaster ride, as a jumpy bond market reacts to various data reports from Canada, the United States, and beyond. After a brief respite in December and January where bond yields tumbled, they’ve now risen to the 3.7% range in large part due to nervous investors spooked by the US Federal Reserve’s “higher for longer” rate stance. Both fixed and variable mortgage rates are currently historically high. If you’re looking to get a mortgage rate in Canada, read on for some economic information you should know.

Real estate update: On April 12, 2024, the Canadian Real Estate Association (CREA) came out with the latest housing market figures for the month of March 2024. The most recent numbers show that the Canadian housing market is currently somewhat flat, although optimism linked to hopes of rate cuts later this year are expected to boost demand during the spring. Per CREA, a total of 42,633 homes changed hands across Canada, marking an annual increase of just 1.7%, and only 0.5% more than in February. New listings dipped on a monthly basis by -1.6%, which in turn caused the sales-to-new-listings ratio (SNLR) to tighten to 57.4%. CREA uses the SNLR to gauge competition in the marketplace, with 45-65% indicating a balanced market, with above and below that range indicating sellers’ and buyers’ markets, respectively. In the bigger picture, however, the supply of new listings continues to recover from the record lows seen in 2023; the 76,021 residential properties that came to market in March represent a 10% annual increase. Still, this new supply was not enough to prevent price growth – the average home price in Canada rose by 2% to $698,520.

Read more: Canadian home sales were flat in March, but rate cut boost expected
CPI update: The latest Consumer Price Index (CPI) reading from Statistics Canada for the month of March saw headline inflation come in at 2.9%, 0.1% above the previous month’s reading. The increase was propelled largely by year-over-year gas price increases, as well as a 6.5% annual increase for shelter costs, which include mortgage interest costs as well as rents. The latter was the single largest contributor to the March CPI figure. It’s not all bad news, though - food inflation continues to decline, with just a 1.9% annual rise. Most importantly from the Bank of Canada’s perspective, both “core” median and trim inflation have fallen to 2.8% and 3.1%, respectively. These particular metrics are a key driver behind the Bank’s rate decisions. While the central bank would like to see both of these metrics below the 3% mark, this report suggests that rate cuts could come as early as June. However, we will see April’s CPI report before the Bank’s next rate announcement on June 5, 2024, which may affect how the Bank chooses to proceed.

2024 Housing market forecast

Taking into consideration expectations of rate cuts and bottled-up buyer demand, CREA has updated its forecast for 2024 and 2025.

The organization projects that some 492,083 residential properties will change hands in 2024, representing a 10.5% increase from 2023. Growth is predicted to be strongest in areas where demand for homes has remained consistently robust, such as Alberta. Nevertheless, even markets that have suffered from historically low sales, among them Ontario, British Columbia and Nova Scotia, will also experience increased housing market activity. Unsurprisingly, the average home price in Canada is predicted to climb by 4.9% to $710,468 in 2024.

2025 is expected to see activity rebound even further, with a prediction that some 530,494 homes will sell by the end of the year (an annual increase of 7.8%). The average home price in Canada is projected to rise by 7% to $760,120.

April 10, 2024 Bank of Canada announcement update

On April 10, 2024, the Bank of Canada held its target for the overnight rate unchanged at 5.00%.

Multiple factors justified the Bank’s sixth consecutive rate hold, including stalled economic growth and weakening labour market conditions.
While the Bank’s commentary highlighted significant progress made in the fight against runaway inflation, it nonetheless noted that February’s CPI reading of 2.8% remained above its target of 2%. In consequence, the Bank reaffirmed that higher rates were needed for longer in order to get inflation down to where it needs to be.
Canadians with variable-rate mortgages and home equity lines of credit (HELOC) will need to stay patient, as the Bank has not moved up its timing for potential rate cuts.
While fixed mortgage rates are not tied directly to the Bank of Canada’s rate decisions, but rather to the bond market, the Bank’s commentary can still incite bond yields to rise or fall. With this rate hold largely anticipated, however, the bond market has reacted minimally. As such, we can expect lenders to keep their fixed mortgage rates where they are for the near future.
Anyone shopping for a home or whose mortgage is up for renewal should obtain a rate hold to protect themselves from any unexpected rate rises.
This announcement is unlikely to have any effect on home prices. Home buyers and sellers have already come out in force in anticipation of rate cuts in the latter half of this year and into 2025, and the Bank’s commentary made it clear that they will come no sooner than that.

Best 5-year variable mortgage rates +

Rate	Term	Type	Provider
5.95%	5 years	Variable	Canadian Lender
6.10%	5 years	Variable	Canwise
6.25%	5 years	Variable	CMLS Financial
6.30%	5 years	Variable	First National
6.30%	5 years	Variable	Equitable Bank

5-year variable mortgage rates: Quick facts

Variable mortgage rates fluctuate with the prime lending rate.
Variable rates are typically stated as "prime plus or minus a percentage".
Some 5.36% of all mortgage requests made to Ratehub.ca from January - December 2023 were for 5-year variable-rate mortgages.
5-year fixed mortgage rates are driven by 5-year government bond yields.
25% of all Canadian mortgage-holders had a variable-rate mortgage as of the end of 2022 (Source: Mortgage Professionals Canada)

Historical 5-year variable mortgage rates

Checking historical mortgage rates is a great way to properly understand which mortgage terms attract lower rates and whether rates are especially high or low at any given moment. Here are the lowest 5-year variable 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 variable mortgage rates

Although fixed-rate mortgages are more popular, according to Mortgage Professionals Canada, 25% of Canadian mortgage-holders had variable-rate mortgages at the end of 2022, making it the second most popular type of mortgage.

Historically, fixed rates are generally more popular, however, in the wake of the COVID-19 pandemic, the Bank of Canada cut its target overnight lending rate in March 2020, which caused the prime rate to go down. As a result, variable-rate mortgages experienced a surge in popularity; as mentioned above, roughly 25% of all mortgages in Canada at the end of 2022 were variable-rate mortgages, in contrast to 20% in 2019. However, as variable-rate mortgages have climbed to rates significantly higher than fixed-rate mortgages in the wake of multiple Bank of Canada rate hikes over the course of 2022, their popularity has waned considerably in 2023. While some 26% of all rate inquiries to Ratehub.ca in 2022 were for 5-year variable rates, they accounted for just shy of 5% of all rate requests to Ratehub in January - September 2023.

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.

What drives changes in 5-year variable mortgage rates?

As previously mentioned, the 5-year variable mortgage rate will fluctuate with any movements in the prime lending rate, which is the rate at which banks lend to their best and most credit-worthy customers. The variable mortgage rate is typically stated as prime plus/minus a percentage discount/premium.

Canada’s prime rate is influenced primarily by economic conditions. The Bank of Canada adjusts it depending on the state of the economy, determined by various factors in employment, manufacturing, and exports. Together, these shape the inflation rate. When inflation is high, the Bank of Canada must act to avert an over-stimulated economy. They will increase the prime rate to make the act of borrowing money more expensive.

Conversely, in cases where inflation is low, the Bank of Canada will decrease the prime rate to stimulate the economy and improve the attractiveness of borrowing. The discount/premium on the prime rate applied to the variable mortgage rate is set by the banks, based on their rate strategy and desired market share.

See today's best mortgage rates

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

4.79%

Best fixed rate in Canada

see my rates

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

As long as you're comfortable with risk and understand that variable rates can fluctuate throughout your term, then a 5-year variable rate is a reasonable choice. Since variable rates do have the inherent risk of rate increases, make sure you have enough money in your budget to cover a higher mortgage payment if rates increase.

If you're still not sure about what mortgage product is right for you, it's a good idea to speak to a mortgage broker. Consultations are free, and you'll leave with expert advice, personalized to you.

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