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5-year fixed mortgage rates in Canada
As of:
WATCH: April 16, 2025 Bank of Canada announcement
Frequently asked questions
Will fixed mortgage rates continue to go down in 2025?
Fixed mortgage rates are influenced by bond market movements rather than directly by the Bank of Canada’s (BoC) rate cuts. While the BoC's recent decision to hold its rate steady at 2.75% in April 2025 has kept borrowing costs stable for variable-rate mortgage holders, fixed mortgage rates are primarily guided by five-year government bond yields. These yields have recently stabilized around 2.6%, following an initial drop to 2.52% earlier in April, as global trade uncertainties — particularly U.S. tariffs — continue to create volatility.
This movement in bond yields has allowed some lenders to offer lower fixed mortgage rates. Currently, the lowest available five-year fixed mortgage rate in Canada is 3.79%, a level not seen since 2022.
Though some lenders may pass on small rate cuts in the coming months, significant reductions are not expected unless there is further easing in bond yields or changes in global economic conditions such as inflation expectations, U.S. tariffs, and global trade developments.
I’m in a variable-rate mortgage. Should I lock-in a fixed-rate?
Locking into a fixed mortgage rate may seem tempting, as Canada’s prime rate, and by extension, variable mortgage rates, saw sharp increases over the course of 2022 and 2023. For those who have had variable-rate mortgages over this time frame, this has resulted in much higher rates and payments than when they first signed their mortgage contract. However, it’s important to note that fixed rates also increased significantly during this time period.
However, variable mortgage rates have trended lower since the second half of 2024. In response to stable inflation, the Bank of Canada implemented seven consecutive rate cuts from June 2024 to March 2025 – bringing down the Overnight Lending Rate to 2.75% and the prime rate to 4.95%. In its latest announcement on April 16, 2025, the Bank held the rate steady at 2.75%. Due to this hold, variable mortgage borrowers will not see any change to their rates. Fixed mortgage rates, influenced by bond market yields, have also declined since mid-2024. The lowest available five-year fixed mortgage rate today is 3.79%, the lowest level seen since 2022.
Before switching your mortgage, consider the spread between your current variable rate and the best fixed or variable rate you can get today.
Read: Think mortgage rates will drop? The argument for getting a variable rate now
If the spread between your current rate and the best fixed or variable rate available today is greater than the expected increase in the prime rate, sticking with your current variable rate may save you more. However, 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 estimate this cost.
Additionally, if you're concerned about fluctuations in your monthly mortgage payments, some lenders offer variable-rate mortgages with fixed monthly payments. In this case, when the prime rate rises, your monthly payment remains unchanged, but more of it goes toward paying interest rather than reducing your principal. Ultimately, it may take you longer to pay back your mortgage amount in full. However, should variable rates increase sharply, this type of mortgage poses the risk of hitting your trigger rate (the point at which your monthly payments are going entirely to interest and not principal), and then your trigger point. The trigger point varies from one lender to another – a common one is when the balance you owe on your mortgage exceeds the amount you initially borrowed. Once you hit this point, even if your payments are 'fixed,' you will have to increase your monthly mortgage payment. Hitting your trigger rate or point is unlikely in a lower interest rate environment, but it’s a risk that borrowers should be aware of.
Is a 5-year fixed-rate mortgage a good idea right now?
Fixed mortgage rates have historically been the most popular rate type in Canada, because they offer borrowers peace of mind; unlike a variable mortgage rate, which will fluctuate whenever the Bank of Canada changes its target Overnight Lending Rate, fixed mortgage rates are guaranteed for the mortgage’s entire term. This can help borrowers avoid volatility in the market, especially if rates rise unexpectedly. In 2023, 79% of rate inquiries on Ratehub.ca were for fixed rates, compared to just 5% for variable rates.
However, fixed rates come with less flexibility. If rates drop during your term, switching to a lower rate requires breaking your mortgage, which can incur significant penalties. Alternatively, you’d need to wait until renewal to potentially secure a lower rate.
Borrowers should keep in mind that while fixed mortgage rates have been trending lower throughout most of 2024, the market remains quite volatile – factors such geopolitical tensions, unexpected inflation growth or hawkish messaging from the Bank of Canada all have the ability to cause spiking bond yields, which in turn would drive fixed rates higher. In short, borrowers making the decision between a fixed or a variable mortgage rate should work closely with a mortgage professional like a mortgage broker, to assess their personal financial situations and risk tolerance.
Is it better to choose a 2-year or a 5-year fixed-rate mortgage?
The length of your mortgage term affects the balance between stability and flexibility. A 5-year fixed term provides long-term protection from rate fluctuations, offering stability throughout the term. However, it locks you into the rate for five years, meaning you cannot take advantage of potential rate drops until renewal.
In contrast, a 2-year fixed term allows you to reassess your mortgage sooner, which can be beneficial if you anticipate lower rates or changes in your financial situation. However, shorter-term mortgage rates are higher than five-year options, and there is no guarantee that interest rates won’t rise during the shorter time frame, meaning you might have to renew at a higher rate. Ultimately, your decision should align with your financial goals and risk tolerance.
What impact do changing fixed rates have on the stress test?
As fixed mortgage rates remain elevated compared to the historical lows seen during the pandemic, the mortgage stress test threshold continues to pose a tough hurdle for many borrowers.
Mortgages are currently stress tested based on the higher of:
- the qualifying rate (currently 5.25%), or
- your contract rate + 2%
As of April 25, 2025, the lowest available high ratio 5-year fixed rates are at 3.79%, while the lowest variable rate available is 3.95%. Therefore, whether you have a fixed-rate or variable-rate mortgage, the stress test used is the contract rate + 2% ((as that is 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
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Guide to 5-year fixed mortgage rates

Jamie David, Sr. Director of Marketing and Mortgages
April 2025: Mortgage market update
Canada’s housing market faced a sharp slowdown in early 2025, as tariff concerns and economic uncertainty kept many buyers on the sidelines. However, affordability is improving, as home prices decline and mortgage rates continue to fall. The Bank of Canada has now implemented seven consecutive rate cuts, most recently bringing its benchmark rate down to 2.75%.
If you’re looking for a mortgage rate in Canada right now, these are some important economic factors to know.
- CPI update: Canada's inflation rate showed a surprising dip in March 2025, with the annual Consumer Price Index (CPI) rising by 2.3%, down from 2.6% in February. This decrease came despite the conclusion of the winter GST tax holiday, which had temporarily reduced prices on various goods. The primary drivers behind the lower-than-expected inflation were the drop in gas prices and reduced travel costs. Gasoline prices fell by 1.6%, while air travel costs dropped by 12% year-over-year, and travel tour prices declined by 4.7%. On the other hand, food prices continued their upward trend, with grocery store and restaurant prices each rising by 3.2%. Shelter costs also contributed to the inflation figure, with a moderate 3.9% increase driven by a 7.9% rise in mortgage interest costs, which had decreased from 9% in February. This decline reflected the Bank of Canada’s interest rate cuts since June 2024, offering some relief to borrowers. Rent prices saw a 5.1% increase, continuing their upward trend.
Read more- March CPI comes in surprisingly low at 2.3% -
Real estate update: In March 2025, the Canadian Real Estate Association (CREA) reported a significant drop in home sales, reaching a low not seen since 2009. A total of 39,202 properties were sold, down 9.3% compared to March 2024 and 4.3% lower than February 2025. The decline is attributed to ongoing trade war fears, with tariff uncertainty continuing to dampen buyer confidence. According to CREA’s Senior Economist, Shaun Cathcart, the decline is largely due to tariff uncertainty, with further economic repercussions from the trade war affecting buyer confidence. The national average home price in March was $678,331, reflecting a 3.7% year-over-year decline. Although prices have softened, CREA does not foresee a major correction. In terms of inventory, the number of homes listed for sale rose to 86,953, up 13.1% from the previous year. This increase in inventory, combined with a decline in sales, led to a sales-to-new listings ratio of 45.9%, the lowest since February 2009. CREA considers this range, between 45% and 65%, to indicate a balanced market. Despite the national slowdown, certain regions in Canada are experiencing tighter, seller-friendly conditions.
Read more: Canadian March home sales fall to 16-year low as tariff fears persist
Housing market forecast for Canada for 2025
CREA has revised its 2025 and 2026 housing market forecasts, adjusting expectations for both home sales and average home prices due to ongoing economic uncertainties, particularly stemming from a potential trade war. CREA’s updated forecast indicates that 482,673 residential properties are expected to be sold in 2025, representing a small decline of 0.02% from 2024. This marks a significant downward revision from the 8.6% growth originally projected in January. Additionally, the national average home price is now expected to decrease slightly by 0.3% to $687,898 in 2025, reflecting a $30,000 reduction from the earlier forecast. For 2026, CREA anticipates a slight improvement in home sales, with a forecasted 2.9% increase to 496,487 units sold. However, sales are expected to remain below the half-million mark for the fourth consecutive year. The national average home price is projected to rise by a modest 1.2% in 2026, reaching $696,074. Given the current unpredictability in the economy and interest rate movements, the forecast remains highly uncertain.
April 16, 2025, Bank of Canada announcement update
On April 16, 2025, the Bank of Canada decided to keep its trend-setting overnight lending rate at 2.75%, marking a pause after what would have been the eighth consecutive rate cut. The decision came in response to ongoing inflationary pressures and the continued uncertainty surrounding global trade, particularly tariffs.
- The decision to hold rates was driven by the need to balance economic growth with price stability, with the BoC keeping a close eye on inflation. Although inflation slowed down to 2.3% in March, it remains above the Bank's 2% target.
- As a result of this rate hold, variable-rate mortgage holders and those with other variable-rate financial products, such as personal loans and HELOCs, will see no changes to their rates. The current lowest variable mortgage rate remains at 3.95% in Canada.
- Fixed mortgage rates, which are tied to government bond yields, have benefited from bond yields stabilizing in the 2.6% range because of tariff uncertainty. This led to discounts on fixed rates, with the lowest five-year insured fixed mortgage rate now at 3.79% (3.74% in Quebec).
- The rate hold also ensures stability for savers with high-interest savings accounts (HISAs) and Guaranteed Investment Certificates (GICs), as they’ll see no change to their returns.
- With global trade tensions complicating economic forecasts, future decisions on policy rate will depend on how trade disruptions, inflation, and other factors unfold in the coming months.
How U.S. tariffs impact Canadian mortgages and the housing market
On April 2, 2025, after months of uncertainty regarding U.S.- Canada trade relations, the U.S. clarified the details of its tariff strategy. While the U.S. had previously discussed imposing new tariffs, Canada was largely exempt from these, including the 50% reciprocal tariffs imposed on other countries. However, Canada still faces a 25% tariff on non-CUSMA imports, as well as the 25% tariff on steel, aluminum, and foreign cars and parts.
These tariff escalations have rattled global markets. In Canada, the Government of Canada bond yield fell to 2.488% on April 3, 2025 — the lowest since 2022. As a result, Canadian fixed mortgage rates have dropped significantly in recent weeks. Rates for insured mortgages are now as low as 3.74%, and uninsured mortgage rates are at 3.99%.
The Bank of Canada (BoC), initially expected to cut its trend-setting Overnight Lending Rate in response to the economic uncertainty, may instead decide to hold rates steady. The BoC has made it clear that while it will continue to monitor the global situation.
The overall impact of the tariffs has caused a slowdown in the Canadian housing market. While there was previously pent-up demand and an expectation of a strong spring season, the uncertainty surrounding tariffs has made homebuyers more cautious. February data from the Canadian Real Estate Association (CREA) showed a 10.4% year-over-year drop in home sales.
Also read: How could 25% US tariffs impact Canadian mortgage rates?
Canadian mortgage reform update
On September 16, 2024, the federal government announced sweeping changes to mortgage qualification rules for first-time home buyers, as well as those purchasing newly-constructed homes.
As of December 15, 2024:
- 30-year amortizations will be available for all first-time home buyers, regardless of whether they have an insured mortgage. These extended amortizations are also available for any purchase of new construction.
- The maximum purchase price for an insured mortgage (where less than 20% down is paid) will be increased to $1.5 million, from the current $1 million.
These are some of the most impactful mortgage reforms announced since 2012, and are anticipated to increase first-time home buyers’ affordability and access to the housing market.
Learn more about these new mortgage rule changes on the Ratehub.ca blog
Best 5-year fixed mortgage rates
Rates updated:
Rate | Term | Type | Provider |
---|---|---|---|
3.79% | 5 years | Fixed | Canadian Lender |
3.89% | 5 years | Fixed | Meridian Credit Union |
3.99% | 5 years | Fixed | Canwise |
3.99% | 5 years | Fixed | CIBC |
3.99% | 5 years | Fixed | Simplii Financial ™ |
5-year fixed mortgage rates: Quick facts
80%
Four out of five of all mortgage requests made on Ratehub.ca from January - December 2023 were for 5-year fixed-rate mortgages
69%
69% of all mortgages contracted in 2024 were fixed-rate mortgages (Source: 2024 CMHC Mortgage Consumer Survey)
- 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 historically high 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 enjoyed access to some of the best fixed rates available in decades, although fixed rates started to climb again in October of 2021. Since then, high inflation, global banking instability, an incredibly tight job market and other factors have all pushed bond yields up, and with them, fixed mortgage rates. Today’s fixed rates are now higher than they have been since back in 2009.
- 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.
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.
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 - in 2023, from January to December, almost 95% of mortgage rate inquiries made to Ratehub.ca were for fixed rates. Moreover, according to the 2024 CMHC Mortgage Consumer Survey, 69% of all mortgages contracted in 2024 were for fixed-rate mortgages. The table below, sourced from the same survey, shows the popularity of fixed-rate mortgages in 2024 among the four main categories of people who contracted mortgages.
First-time home buyers | Repeat buyers | Renewers | Refinancers |
71% | 75% | 71% | 60% |
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
- Trends in the Canadian Mortgage Market: Before and During COVID-19, Statistics Canada, 2021
- Annual State of the Residential Housing Market in Canada, Mortgage Professionals Canada, 2021
- Housing Market Report: 2022 Year-End Consumer Survey and Outlook, Mortgage Professionals Canada, 2023
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