Question 1

What are 5-year fixed mortgage rates?

Accepted Answer

u003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eThe '5' in a 5-year mortgage rate represents the term of the mortgage, not to be confused with the u003c/spanu003eu003ca href=u0022https://www.ratehub.ca/mortgage-term-vs-amortizationu0022 rel=u0022noopener noreferreru0022u003eu003cspan style=u0022font-weight: 400;u0022u003eamortization periodu003c/spanu003eu003c/au003eu003cspan style=u0022font-weight: 400;u0022u003e. 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 typical mortgage might have a 5-year term and a 25-year amortization period, for example.u003c/spanu003eu003c/pu003enu003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eWhen the mortgage rate is 'fixed' it means that the rate (%) is set for the duration of the term. For example, if your 5-year fixed mortgage rate is 4%, then you will pay 4% interest throughout the term of the mortgage. The alternative is a 'variable' mortgage rate, where the rate fluctuates with the market interest rate, known as the 'prime rate'.u003c/spanu003eu003c/pu003enu003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eAn interesting feature of the 5-year fixed mortgage rate is that all borrowers must meet its standards of approval, even if they choose a mortgage with a lower interest rate and shorter term. This benchmark is applied not only to reduce the risk for the lender but to give the borrower some breathing room.u003c/spanu003eu003c/pu003e

Question 2

How much can I save comparing 5-year fixed rates?

Accepted Answer

u003cdivu003enu003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eYour mortgage is likely to be the largest financial commitment you’ll ever make, and getting a better rate can save you thousands of dollars over a 5-year term. Even a slightly lower mortgage rate can result in big savings, especially early on in your mortgage.u003c/spanu003eu003c/pu003enu003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eFor example, on a $500,000 mortgage with a 25 year amortization period, a rate of 3.00% would see you pay $69,347 interest over 5 years. With a 2.75% rate, you’d pay $63,454 interest over the term. So, a difference of just 0.25% can save you $‭5,893‬ over your 5-year term.u003c/spanu003eu003c/pu003enu003c/divu003e

Question 3

Why compare 5-year fixed rates with Ratehub.ca?

Accepted Answer

u003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eWe 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.u003c/spanu003eu003c/pu003e

Question 4

Why are fixed rates different to variable rates?

Accepted Answer

u003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eYou can think of the difference u003c/spanu003eu003cspan style=u0022font-weight: 400;u0022u003ebetween variable and fixed mortgage rates as the price of insurance that mortgage costs will not increase during your term. Fixed rates transfer the risk of a rate rise onto your lender. It makes up for this increased risk by setting different rates for fixed-rate mortgages, as well as by charging a larger prepayment penalty on fixed rates.u003c/spanu003eu003c/pu003enu003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eThe 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 accompany a variable-rate mortgage.u003c/spanu003eu003c/pu003enu003cpu003eu003cspan style=u0022font-weight: 400;u0022u003eOn 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. Examined historically, variable rates have proven to be less expensive over time.u003c/spanu003eu003c/pu003e

Question 5

Are 5-year mortgages better than other mortgage terms?

Accepted Answer

u003cdivu003enu003cpu003eu003cspan style=u0022font-weight: 400;u0022u003e5-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. However, 5-year terms offer a good compromise - they’re long enough to provide some stability but short enough to not lock you in for a long time.u003c/spanu003eu003c/pu003enu003c/divu003e

Rate	Provider	Payment
	Big 6 Bank	^$2,251
	Canadian Lender	^$2,251
	RBC Royal Bank	^$2,263
	Desjardins	^$2,263
	CIBC	^$2,308
	Meridian Credit Union	^$2,310
	Bank of Montreal	^$2,319
	First National	^$2,319
	Alterna Savings	^$2,319
	Scotiabank	^$2,330
	TD Bank	^$2,330
	CMLS Financial	^$2,330
	Canwise A Ratehub Company	^$2,330
	Equitable Bank	^$2,341
	MCAP	^$2,376
	ICICI Bank Canada	^$2,526
	motusbank	^$2,693
	Tangerine	^$2,398
	Simplii Financial ™	^$2,410
	National Bank	^$2,729

Best 5-year fixed mortgage rates in Canada

5-Year Fixed Mortgage Rates

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5-year fixed rates: Frequently asked questions

What are 5-year fixed mortgage rates?

How much can I save comparing 5-year fixed rates?

Why compare 5-year fixed rates with Ratehub.ca?

Why are fixed rates different to variable rates?

Are 5-year mortgages better than other mortgage terms?

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