Find today's best mortgage rates in Canada

How to choose between a fixed or variable mortgage rate in Canada

The difference between fixed and variable mortgage rates is whether or not they will change over the term of your mortgage. Fixed rates will stay the same over the course of your mortgage term (usually 5 years), while variable rates will change alongside changes in your lender’s prime rate.

Fixed mortgage rates:

Fixed mortgage rates are a historically popular option, with 5-year fixed mortgage rates accounting for 77% of all mortgage requests made on Ratehub.ca from January to December 2025. Moreover, according to the 2025 CMHC Mortgage Consumer Survey, 62% of all mortgages contracted in 2025 were fixed-rate mortgages. The benefit of a fixed mortgage is that you are protected against interest rate fluctuations, so your regular payments stay constant over the duration of your term, regardless of what happens in the market. A fixed rate mortgage is ideal for you if you have a low appetite for risk. You’ll know how much you’ll be paying monthly right from the outset and not have to monitor interest rates.

Variable mortgage rates:

Variable mortgage rates typically start lower than fixed rates but can change over time as prime rates move. In 2021 and early 2022, variable rates were significantly cheaper than fixed rates, making them a popular choice. However, following 10 rate hikes between March 2022 and July 2023, variable rates rose above fixed rates. After nine rate cuts between June 2024 and October 2025, variable rates have fallen again, with the best 5-year variable option now around 3.35%. Despite being lower today, variable rates still carry more uncertainty, as payments or interest costs can change over the term.

Fixed vs variable mortgages, which is better now?

There’s no one-size-fits-all answer. While fixed rates remain more popular overall, interest in variable rates has begun to recover. According to the 2025 CMHC Mortgage Consumer Survey, 25% of mortgages contracted during 2025 were variable-rate mortgages (up from 23% in 2024). 

Variable mortgages come with some advantages worth considering:

• You can convert a variable rate to a fixed rate at any time without a penalty as long as you stay with your original mortgage lender.
• Breaking a variable rate mortgage is substantially less expensive than breaking a fixed rate mortgage. To estimate the cost of breaking your mortgage, our mortgage penalty calculator is a useful tool.
• 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.

That said, variable rates can be more volatile, and since late 2022 they have often been higher than fixed rates. Choosing between fixed and variable ultimately comes down to your risk tolerance, cash-flow flexibility, and how comfortable you are with potential rate changes during your term.

Canada housing & mortgage market update: January 2026

The housing market in Canada saw a rather quiet start to 2026, as buyers stayed on the sidelines. When looked at from a historical perspective, both fixed and variable mortgage rates are currently elevated. Anyone shopping for a mortgage rate in Canada today should be aware of the economic factors below.

How mortgage structure affects your rate

Beyond choosing a fixed or variable rate, the structure of your mortgage — including term length and repayment flexibility — can affect both your interest rate and overall cost.

How to select the term for your mortgage rate

Choosing between a short-term mortgage or a long-term mortgage can also affect your interest rate. A short-term mortgage generally offers a lower rate, and, as it requires more frequent renewal, you can benefit from lower interest rates when you renew, if rates stay low at your renewal. Long-term mortgages, on the other hand, offer stability, as you won’t need to renew it often. However, long-term mortgage holders may not be able to take advantage of lower interest rates if the market fluctuates. 

Choosing between open and closed mortgages

Open and closed mortgages differ mainly in how flexible they are when it comes to paying off your mortgage early: closed mortgages offer lower rates with limits on early repayment, while open mortgages allow you to pay off the full balance at any time, usually in exchange for higher rates. The most common type of open mortgage is the Home Equity Line of Credit (HELOC). 

How your personal profile affects your mortgage rate in Canada

It’s important to understand that the best mortgage rate you qualify for may change depending on your unique borrowing profile. Here are some of the factors that influence what mortgage rate you qualify for:

• The type of mortgage: If your mortgage is for a refinance, rather than a purchase or renewal, you’ll be eligible for higher rates. For individuals with an existing mortgage who have good credit and more than 20% equity in their homes, in addition to refinancing, you can also explore a home equity line of credit (HELOC).
• Your down payment: If you’re purchasing a home and your down payment is less than 20% of the purchase price and the value of the home you are purchasing is less than $1.5 million, you’ll be required to purchase mortgage default insurance (sometimes known as CMHC insurance). This insurance is added to your mortgage amount and, while it will cost you money, it will result in a lower mortgage rate as your mortgage is less risky for your lender. If you’re renewing your mortgage, in order to be eligible for the lowest mortgage rates you would have needed to purchase CMHC insurance on the original mortgage. 
• Your intended use of the property: Your mortgage rate will be higher if you plan to rent your property out vs. live in it as your primary residence.
• Your amortization period: Insurable mortgages (i.e. mortgages for homes valued at less than $1.5 million with a down payment of less than 20% of the purchase price) in Canada have a maximum amortization period of 25 years. Regardless of the price of your home, if you make a down payment of at least 20%, you are able to access a mortgage that allows a longer amortization period, such as a 30-year period. While longer amortization periods will usually result in a lower monthly payment, they can come with a slightly higher interest rate. Moreover, by taking longer to pay back the mortgage, you will pay more in interest overall than you would with a shorter amortization period.
• Credit score and income: Your credit score and income are central to both approval and pricing. A credit score of 680 or higher is typically needed to qualify for the best mortgage rates, while scores as low as 560 may still qualify for a mortgage at higher rates. Lenders will also review your credit history for missed payments or collections and require proof of income, such as pay stubs or a Notice of Assessment (NOA). If you’re newly employed, many lenders prefer to see at least one year of job stability.

How the stress test impacts mortgage qualification

In Canada, most borrowers must pass the mortgage stress test when applying for a new mortgage. This means you need to qualify at the higher of 5.25% or your contract rate plus 2%, to show you could still afford your payments if interest rates rise. For example, if your lender offers you a mortgage rate of 5%, you’ll need to prove you could afford to make your payments at 7% in order to pass the test and qualify for your mortgage loan.

All mortgage borrowers must be stress tested, with two exceptions:

• Borrowers who are renewing their mortgage term at their original lender often are not re-stress tested.
  
• Borrowers with high-ratio, insured mortgages switching to another lender at renewal may not be stress tested, as long as the original terms of their loan and amortization do not change.

Historical Canadian mortgage rates

Looking at historical mortgage rates helps put today’s rates into context and shows how different mortgage types tend to behave over time. Canada saw record-low rates in 2020 and 2021, when the lowest five-year fixed mortgage rate fell to 1.39% and the lowest five-year variable rate dropped to 0.85% as policymakers responded to the pandemic. As inflation surged in 2022 and 2023, interest rates rose sharply, before easing again through 2024 and 2025. As of early 2026, mortgage rates remain well above pandemic lows but are significantly lower than their recent peaks.

Here are some of the lowest Canada mortgage rates of the year for different types of mortgages over the past five years.

Source: Ratehub Historical Rate Chart

Is it worth working with a mortgage broker to get the best mortgage rate?

Working with a mortgage broker can be worth it if you want to compare rates from multiple lenders in one place. Brokers have access to a wide range of banks, credit unions, and lenders, which can make it easier to see competitive rates you might not find by going to a single bank. However, working directly with your bank can still make sense if you value convenience or already have a strong relationship. Many borrowers choose to compare options first and then decide whether a broker or a bank offers the best fit for their situation.