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Best mortgage rates in Canada
To see the current best Canada mortgage rates from the Big 5 Banks, click on the "Best bank rates" tab.
WATCH: April 10, 2024 Bank of Canada announcement
Canada mortgage rates: Frequently asked questions
What is the best mortgage rate in Canada right now?
As of April 11, 2024, the best high-ratio, 5-year fixed mortgage rate in most of Canada is 4.74%, which is available in Quebec only. The best high-ratio, 5-year fixed mortgage rate across most of Canada, including in Ontario, British Columbia and Alberta is 4.79%.
As of April 11, 2024, the best high-ratio, 5-year variable mortgage rate in Canada is 5.95%, which is available across Canada, including Ontario, Quebec, British Columbia and Alberta.
As of April 11, 2024, the average 5-year fixed mortgage rate available from the Big 5 Banks is 5.05%. Rates from the Big 5 Banks currently range from 4.84% to 5.14%.
To find the best mortgage rates in Canada in 2024, use our rate table to compare the lowest mortgage rates currently offered by Canada’s Big Banks and top mortgage lenders.
Will interest rates in Canada go down in 2024?
Could 2024 usher in some much-desired mortgage rate relief? Canada’s cost of borrowing has skyrocketed over the past two years; in 2022 alone, fixed mortgage rates more than doubled, while variable mortgage rates soared from their pandemic lows by over 500 basis points due to one of the steepest central bank rate-hiking cycles in history.
That trend continued steadily throughout 2023, as the Bank of Canada (BoC) administered another 75 basis points via three rate hikes (resulting in 10 total from the central bank). As a result, the lowest five-year variable rate in Canada rose from 5.3% at the start of the year, to a high of 5.95% by December 2023. Fixed mortgage rates were also driven higher by the resulting reaction in the bond market; they started 2023 at a low of 4.39%, and rose to 5.24% by year-end.
It’s no wonder borrowers are keen to know whether the cost of borrowing will become more manageable in the coming months!
The good news for borrowers is that the BoC — which controls the strength of Canada’s currency, inflation growth, and benchmark interest rate – has strongly indicated that it no longer needs to hike interest rates in order to cool runaway inflation. In its most recent rate announcement on April 10, 2024, its Governing Council wrote that a number of key economic indicators, such as a stalled economy and softening labour market conditions have given it room to continue easing off of the monetary policy gas pedal.
However, the Bank did note that while inflation has improved considerably – now 2.8% from the 40-year high of 8.1% in June 2022 – the measure remains above its desired 2% target, necessitating rates to stay higher for longer in order to further tamp down inflation. However, as long as the data continues to perform in line with the BoC’s expectations, it’s widely anticipated that the central bank will begin to cut rates potentially as early as the latter half of 2024 and into 2025. Should that materialize, Canada’s prime rate – and by extension, variable mortgage rates – will lower in response.
While fixed mortgage rates are not directly influenced by the BoC’s rate decisions, they are guided by the bond market, which responds sharply to investor sentiment. Bond investors react negatively to central bank rate hikes, as they devalue their existing bonds. This in turn leads to bond sell-offs, which drives up yields – the funding floor lenders use when setting their fixed mortgage rate pricing.
In fact, five-year government of Canada bond yields hit a 16-year high of 4.42% in October, which drove fixed rates up dramatically in response. Since then, bond yields have been on something of a roller coaster ride, as anxious investors react quickly to economic reports from Canada and overseas. They dropped steadily from late December 2023 and into January before climbing once more, falling again in February and into March before rising again to their current 3.7% range. This is not enough to incite lenders to raise their fixed mortgage rates, so they are likely to remain at their current level for the near future.
It is thus reasonable to expect that both variable and fixed mortgage rates will remain elevated but stable until further notice.
What is the lowest mortgage rate in Canadian history?
According to Ratehub.ca’s historical mortgage rate database, the lowest five-year variable mortgage rate was 0.85%, in December 2021. The lowest five-year fixed mortgage rate was 1.39%, available in January and February of 2021. Rates were at record lows at this time as part of the Bank of Canada’s response to the pandemic; interest rates were slashed in the early months of 2020 as lockdowns slowed the economy. Doing so helped stabilize consumer demand, and prevented a credit crunch from lenders, ensuring the economy operated as smoothly as possible during this unprecedented event.
However, as those lockdowns eased and consumer demand rebounded amid ongoing pandemic-related supply chain issues, inflation has soared since the start of 2022, which prompted the central bank to dramatically increase its cost of borrowing from those early 2021 lows.
How does inflation affect mortgage rates in Canada?
To combat rising inflation, the Bank of Canada increases its target for the overnight lending rate (also known as the benchmark interest rate in Canada). This in turn makes it more expensive for consumers and businesses to borrow money and incentivizes savings. As a result of people spending less and saving more, demand in the market goes down, which then decreases the rate of inflation.
When the Bank of Canada increases its benchmark interest rate, banks and other mortgage lenders also increase their prime lending rates. Since variable mortgage rates are directly tied to a lender’s prime rate (in fact, variable mortgage rates are calculated as a discount from the prime rate), when the Bank of Canada hikes its key interest rate, variable mortgage rates consequently also go up.
Fixed mortgage rates, on the other hand, are not tied to the prime rate. Instead, they are directly related to five-year bond yields. As bond yields increase, the cost to lend money also increases. As a result, lenders raise their fixed mortgage rates.
The Canadian bond market has been quite volatile in recent years, as investors have reacted to plenty of economic instability, from pandemic lockdowns to surging inflation and rate hikes. Overall, the five-year government of Canada bond yield rose from 1.25% at the end of 2021 to a peak of 4.42% in October 2023. After moderating back to the low 3% range as of early 2024, several surprisingly strong economic reports from Canada and the US pushed bond yields up to the 3.7% range, sending fixed mortgage rates slightly upward. However, in light of lower-than-expected CPI readings from January’(2.9%) and February (2.8%) and other important economic indicators, fixed mortgage rates have come down slightly and are currently holding steady.
How do I get the best mortgage rate in Canada in 2024?
Make sure you compare mortgage rates across the different banks, credit unions and top mortgage lenders in Canada. You can use our rate table above to compare the best mortgage rates in just a glance.
After comparing the different Canada mortgage rates currently available, you should then get a personalized quote to see which mortgage rate you can actually get given your situation. At Ratehub.ca, we can provide you a quote in just 2 minutes. To get a mortgage quote, enter some basic information (i.e. down payment amount, purchase price, location) so we can show you the lowest rate you can actually get.
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.
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Guide to Mortgage Rates in Canada
![](https://cms.ratehub.ca/wp-content/uploads/2019/04/JamieD-300x300.jpg)
Jamie David, Sr. Director of Marketing and Mortgages
April 2024: Mortgage market update
The early months of 2024 were volatile for the Canadian housing market, but there are early signs that sales activity will improve, as expectations rise that rate cuts could come from the Bank of Canada as early as the summer months.
Bond yields, however, continue to roller coaster up and down, as investors react to conflicting economic data reports. After tumbling in December and January, they’ve risen once again to the 3.7% range, as markets are anxious over a “higher for longer” stance from the US Federal Reserve.
Overall, variable and fixed mortgage rates remain historically elevated. If you're shopping for a mortgage rate in Canada right now, here are some economic factors you should be aware of.
- Real estate update: The latest March data, released by the Canadian Real Estate Association (CREA) on April 12, 2024, shows that home sales continue to be flat, though optimism over future rate cuts is likely to stoke demand in the coming spring months. According to CREA, national home sales increased just 1.7% year over year, and 0.5% from February, with a total of 42,633 properties sold. The national average home price rose 2% to $698,520, while the MLS Home Price Index – a measure of the most typical type of home sold – was roughly flat, up 0.7%. New home supply dipped slightly by -1.6% from February, which was enough to tighten the sales-to-new-listings ratio (a metric that measures the level of competition in the housing market), to 57.4%. This reflects an overall balanced market; CREA considers a range between 45 - 65% to indicate as such, with above and below that threshold reflecting sellers’ and buyers’ markets, respectively. However, from an annual perspective, supply continues to recover from last year’s record lows, marking a 10% increase, with 76,021 listings brought to market. Overall, CREA is anticipating buyer demand to heat up in the coming months as the Bank of Canada prepares to cut interest rates in June or July. “We’ll have to wait for the April data to really understand how buyers are responding to all these new properties for sale, but if you look at last spring as a guide and add to that record population growth in the last year and a central bank that is far more likely to cut this summer than raise like it did last year, it could get interesting,” said Shaun Cathcart, CREA’s Senior Economist. “Will the story be high interest rates keeping a lot of people on the sidelines this year, or the much expected and anticipated first rate cuts enticing a lot of people back into the market? Probably a bit of both.”
Read more: Canadian home sales were flat in March, but rate cut boost expected - CPI update: The March Consumer Price Index (CPI) report from Statistics Canada, released on April 16, 2024, reveals the headline inflation number rose to 2.9%. That’s a tick higher than February’s 2.8%, driven largely by year-over-year price gains at the gas pump. Shelter inflation, which includes mortgage interest costs and rents, rose 6.5% annually, with mortgage interest specifically up 25.4%, marking the largest contributor to the CPI basket of goods. However, food inflation continues to improve, rising just 1.9%. Most importantly for the Bank of Canada, the “core” median and trim inflation measures – which the central bank closely monitors when making its interest rate decisions – lowered to 2.8% and 3.1%, respectively. The Bank wants to see both of those metrics below the 3% mark. Overall, this inflation report supports the possibility of rate cuts as early as June, though one more report is due before the Bank’s next rate announcement on June 5, 2024.
Read more: Canadian CPI comes in at 2.9% in March
2024 Housing Market Forecast
CREA also updated its forecast for 2024 and 2025, due to growing expectations of rate cuts, and pent-up home buyer demand.
It anticipates a total of 492,083 homes will be sold in 2024, up 10.5% from 2023. Sales growth is expected to be strongest in provinces where housing demand has been consistent, such as Alberta. However, markets that have seen “historically low sales volume”, such as Ontario, BC, and Nova Scotia, will also see growth. The national average home price will rise by 4.9% to $710,468 in 2024.
Activity will continue to pick up steam in 2025, with sales to hit 530,494 units – an increase of 7.8%, and the national average home price to rise by 7% to $760,120.
Highlights from the Bank of Canada's April 10, 2024 announcement
At its third announcement of the year on April 10, 2024, the Bank of Canada kept its target for the overnight rate unchanged at 5.00% for the sixth time in a row.
- A number of key economic indicators justified yet another rate hold by the Bank, including stalled economic growth and softening labour market conditions. The Bank is continuing its “wait and see” stance to ensure that inflation has been tamped down to the goal rate of 2%.
- While the Bank noted that much progress has been made in the battle against inflation, it remained above the Bank’s target at 2.8% in February, and consequently, higher rates need to be maintained for longer to rein it in. The Bank wants to be certain that it does not cut rates prematurely and thus spur inflation to rise.
- Anyone with a variable-rate mortgage or a home equity line of credit (HELOC) will need to continue to be patient, as the Bank has not moved up its timing of potential future rate cuts.
- Although fixed mortgage rates are tied to the bond market and are thus not directly affected by the Bank of Canada’s rate hold, the Bank’s commentary does have an effect on the bond market. In the absence of any new information in the Bank’s announcement today and with this rate hold largely expected, lenders will likely maintain their fixed mortgage rates.
- Canadians looking to buy a home or whose mortgage is up for renewal should get a rate hold now to protect themselves from any further rate increases. Should mortgage rates (namely fixed mortgage rates) go down during the time of your rate hold, you are still eligible for the lowest rate.
- This announcement is likely to have little effect on home values. The Bank’s stance has remained largely unchanged for the past several months, and the prospect of rate cuts before the latter part of 2024 remains virtually nonexistent.
Factors that can affect 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 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 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.
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.
How to choose between a fixed or variable mortgage rate in Canada
Variable vs. fixed mortgage rates
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 nearly 80% of all mortgage requests made on Ratehub.ca from January to September 2023. 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 are typically lower than fixed rates but can vary over the duration of your term. Variable mortgages are prone to market behaviour (via the prime rate) which affects your payments. That means your payment amounts can change over time. Variable rates remained substantially lower than fixed rates throughout 2021 and into 2022, leading a large number of buyers to opt for 5-year variable-rate mortgages. However, as variable-rate mortgages climbed to rates that are higher than fixed-rate mortgages over the course of ten rate hikes between March 2022 and July 2023, their popularity has substantially diminished.
While variable rates are generally lower, they do fluctuate and can be viewed as more risky when compared to fixed rates. Moreover, variable rates have actually been higher than fixed rates since the end of 2022. That said, variable mortgage rates have some key advantages you should know about:
- 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.
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.
Open vs. closed mortgages
If you’re wondering whether to get an open or closed mortgage, the answer is, while an open mortgage may make sense in certain circumstances, the overwhelming majority of Canadians opt for a closed mortgage. While open mortgages have extra flexibility that you might need, closed mortgages are by far the more popular choice not only due to their lower rates, but also because most home buyers do not intend to pay off their mortgages in the short term. Moreover, fixed-rate open mortgages do not exist and variable-rate mortgages are very rare. The most common type of open mortgage is the Home Equity Line of Credit (HELOC). Below are some quick facts about the differences between open and closed mortgages, and you can also find more detailed information on our blog about open vs. closed mortgages.
Closed mortgages:
Closed mortgages have lower rates compared to open mortgages. Closed mortgages can come in fixed and variable form, but place restrictions on the amount of principal you can pay down each year. If you pay off the entire principal in a closed mortgage before the set term, you will face a prepayment penalty, which is normally a 3-month interest charge.
Open mortgages:
Open mortgages allow you to pay off your entire mortgage balance at any time throughout the term. The drawback is that you pay a premium for that option in the form of higher rates. You might opt for an open mortgage if you are planning to move in the near future, or if you’re expecting a lump sum of money through an inheritance or bonus that would allow you to pay more of your mortgage off.
How do I qualify for a mortgage in Canada?
While it’s important to think about qualifying for the best rates, you should also give some thought to the basics that you’ll need to qualify and get approved for your mortgage. To qualify for a mortgage, here are some of the most important things that prospective lenders will want to see.
A good credit score - You should have a credit score of 680 or higher to qualify for the best mortgage rates, but to qualify for a mortgage at all, you’ll need a credit score of at least 560. In addition to looking at your credit score, prospective lenders will also consider any derogatory information from your credit report, such as any missed payments (particularly if they have gone to collections). If you have bad credit, generally defined as a credit score of less than 660, you are unlikely to qualify for the best mortgage rates, and instead you’ll need to use a sub-prime mortgage lender like Equitable Bank or Home Trust. If your credit score is even less than 600, you will most probably need to use a private lender like WealthBridge. Sub-prime mortgage lenders are happy to work with people with a poor credit history, but they will charge higher mortgage rates. It's a good idea to have a detailed understanding of how your credit score affects your ability to obtain a mortgage.
Proof of income - You’ll also need to provide proof of income in the form of pay stubs and/or tax documents like your Notice of Assessment (NOA). Keep in mind that if you recently started a new job, even with proof of income, many lenders will want to see that you’ve held the position for at least a year.
How the stress test impacts mortgage qualification
In Canada, anyone applying for a new mortgage loan must pass the mortgage stress test. The purpose of the stress test is to ensure the borrower could still manage to make their mortgage payments in the case that interest rates rise over the course of their term. The criteria for the stress test is a benchmark rate of 5.25% or the borrower’s contract rate plus 2% – whichever is higher. 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.
The standards for the mortgage stress test are upheld by the Office of the Superintendent of Financial Institutions (OSFI), Canada’s federal banking regulator, for low-ratio, uninsured mortgages. The criteria for high-ratio and insured mortgages is governed by the federal Department of Finance, though they follow exactly the standards put in place by OSFI.
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.
Read more about Canada’s mortgage stress test:
Historical Canada mortgage rates
Looking at historical mortgage rates in Canada is a good way to understand which types of mortgage attract higher rates. They also make it easier to understand whether we’re currently in a low or higher rate environment, relatively speaking.
Here are some of the lowest Canada mortgage rates of the year for different types of mortgages over the past five years.
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Is it worth working with a mortgage broker?
First, what exactly is a mortgage broker? Independent mortgage brokers are licensed mortgage specialists who have access to multiple lenders and mortgage rates. They essentially negotiate the lowest rate for you, and because they acquire high quantities of mortgage products, mortgage brokers can pass volume discounts directly to you. There are advantages to getting a mortgage directly from a lender as well as getting a mortgage through a broker, but there are differences between going with a bank vs. a mortgage broker. While going directly to your current bank lets you consolidate your financial products, using a broker allows you to shop around quickly and easily, at no cost to you.
Luckily, you don’t need to choose one or the other. You can speak to multiple banks and use a mortgage broker if you want to. Ratehub.ca is a great place to start, as we compare the best mortgage rates in Canada from multiple lenders. Once you’ve compared your options, we can put you in contact with your chosen provider.