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Find the best 1-year fixed mortgage rate in Ontario

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Best Ontario 1-year fixed mortgage rates

As of:


Big 6 Bank


Bank of Montreal


RBC Royal Bank






TD Bank

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1-year Fixed Mortgage Rates

The mortgage term (in this case, one year) is the length of time your mortgage rate is in effect. If you select a 1-year fixed-rate, you’ll be able to select a new mortgage type, provider, and rate at no penalty when that year ends.

The mortgage term you choose depends on your expectations of future interest rates. For example, if you think mortgage rates will go up, you may want a longer 5-year term to lock in the current low rate. However, if you feel interest rates will fall, or you want to renegotiate your mortgage in a year's time, you would consider a 1-year mortgage rate.

1-year fixed mortgage rates: Quick facts

  • 6% of Canadians have mortgage terms of one year (Source: CAAMP)
  • 74% of Canadians have fixed mortgage rates (Source: Statistics Canada)
  • 1-year fixed mortgage rates follow 1-year government bond yields

Comparing 1-year fixed mortgage rates

Most consumers are uncertain which direction mortgage rates will take in the near future. Further, many are unsure if a variable or fixed mortgage rate will better serve their financial situation; so, you can select a 1-year fixed rate and observe the market.

Since 1-year fixed mortgage rates are almost always lower than 5-year fixed rates, in falling or flat interest rate environments, some consumers continually lock into a 1-year fixed mortgage rate year after year. However, a similar strategy can be achieved through variable mortgage rates, which are usually lower than 1-year fixed mortgage rates and can always be converted to a fixed mortgage rate at no charge.

1-Year Fixed vs. Longer-Term Mortgage Rates

1-year fixed rates are typically lower than rates than longer terms, like 5 or 10 years. This is because longer fixed-rate terms lock in a lower rate for a longer period of time. That might be great for you, but it puts the risk of a rate rise onto your lender. The higher rate is, therefore, a premium for locking in a lower rate for longer.

Some homeowners opt for a 1-year fixed mortgage rate because they plan to move in a year. The problem with this strategy is that unless the homeowner is moving in exactly one year, they will incur a penalty for breaking their mortgage early. Thus, a variable mortgage rate often makes sense in this case as the interest rate is often lower, and the refinance penalty, three months interest, will be lower than refinancing a fixed mortgage.

Historical 1-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.

The popularity of 1-year fixed mortgage rates

Though fixed-rate mortgages are very common, representing 74% of all mortgages, the 1-year mortgage term is one of the least popular terms, representing only 6% of the Canadian market. The popularity of 1-year mortgage rates in Canada does not vary dramatically by age. (Source: CAAMP)

What drives changes in 1-year fixed mortgage rates?

Fixed mortgage rates follow government bond yields, with 1-year fixed rates following 1-year government bond yields. Bond yields are driven by economic conditions, and the spread between bond yields and lender-posted mortgage rates vary by a lender's marketing strategy and general credit market conditions.

1-year fixed rates: Frequently Asked Questions

Below are the most common questions we're asked about mortgages, with the answers that we're most likely to give.

What are 1-year fixed mortgage rates?

The '1' in a 1-year mortgage rate represents the term of the mortgage, not to be confused with the amortization period. The term is the length of time you lock in the current mortgage rate, while the amortization period is the amount of time it will take you to pay off your mortgage. The term acts like a reset button on your mortgage, at which point you must renew the mortgage at a rate available at the end of the term. A mortgage might, for example, have a 1-year term and a 25-year amortization period.

When the mortgage rate is 'fixed' it means that the rate (%) is set for the duration of the term, whereas with a variable mortgage rate, the rate fluctuates with the market interest rate, known as the 'prime rate'. So, for example, if the 1-year fixed mortgage rate is 4%, then you will pay 4% interest throughout the term of the mortgage.

It's worth noting that all borrowers, even those applying for a 1-year term, will need to meet the standards of approval for the 5-year mortgage rate. This is a standardized benchmark applied to reduce the risk for the lender and to give the borrower some breathing room.

How much can I save comparing 1-year fixed rates?

Your mortgage is likely to be the largest financial commitment you’ll ever make, and getting a better rate can save you thousands, even over just a 1-year term. Even a slightly lower mortgage rate can result in big savings, especially early on in your mortgage.

For example, on a $500,000 mortgage with a 25 year amortization period, a rate of 3.00% would see you pay $14,721 interest over 1 years. With a 2.75% rate you’d pay $13,496 interest over the term. So, a difference of just 0.25% can save you $1,225‬ over your 1-year term.

Why compare 1-year fixed rates with

We make it simple to see current mortgage rates from all of Canada’s leading mortgage providers in one place. We have rates from the big banks, smaller lenders, as well as mortgage brokers across the country. This makes it easy to see who offers the best rates in Canada in real-time, at no cost to you.

Why are fixed rates different from variable rates?

You can think of the difference, or spread, between variable mortgage rates and fixed rates as the price of insurance that mortgage costs will not increase in the next five years, more or less. The advantage of fixed-rate mortgages is that you know exactly how much your mortgage payments will be regardless of whether rates rise or fall. You can, essentially, set it and forget it. This eases the budgeting anxiety that may follow a variable rate mortgage.

When interest rates are low, and the spread between shorter-term rates and the 5-year fixed mortgage rates is less significant, it is typically recommended that you lock in the 5-year rate. The longer-term offers stability and, because rates are historically low, the chances of rates decreasing further with a variable rate are greatly reduced.

On the other hand, as is the case with all fixed mortgage rates, there is the potential to pay higher interest when variable rates are low, and, examined historically, variable rates have proven to be less expensive over time.

Are 1-year mortgages better than other mortgage terms?

1-year mortgage terms aren’t necessarily better than other terms. You should pick a term length based on your financial needs and current situation, as well as what rates are on offer. 5-year terms are the most popular in Canada, as they offer a compromise between stability and flexibility. However, if flexibility is important to you, a 1-year term could be worth considering.

Jamie David, Director of Marketing and Head of Mortgages

Jamie has 15+ years of business and marketing experience. She contributes her mortgage expertise to The Globe and Mail and authors Ratehub’s mortgage and homebuying guides. read full bio

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