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| Insured ? | 80% LTV ? The rates in this column apply to mortgage amounts between 65.01% and 80% of the property value. The home must be owner-occupied and have an amortization of 25 years or less. You must have purchased it for less than $1 million. These rates are not available on refinances. Refinances require "Uninsured" rates. | 65% LTV ? The rates in this column apply to mortgage amounts that are 65% of the property value or less. The home must be owner-occupied and have an amortization of 25 years or less. You must have purchased it for less than $1 million. These rates are not available on refinances. Refinances require "Uninsured" rates. | Uninsured ? | Bank Rate ? | ||
|---|---|---|---|---|---|---|
Insured 6.44% | 80% LTV 5.29% | 65% LTV 5.29% | Uninsured 7.09% | 6.89% | ||
Insured 5.54% | 80% LTV 5.59% | 65% LTV 5.59% | Uninsured 5.84% | 6.19% | ||
Insured 4.69% | 80% LTV 4.69% | 65% LTV 4.69% | Uninsured 4.99% | 5.4% | ||
Insured 4.74% | 80% LTV 4.84% | 65% LTV 4.84% | Uninsured 4.89% | 5.29% | ||
Insured 4.44% | 80% LTV 4.59% | 65% LTV 4.44% | Uninsured 4.44% | 4.84% | ||
Insured 4.89% | 80% LTV 5.29% | 65% LTV 5.29% | Uninsured 5.89% | 5.9% | ||
Insured 5.69% | 80% LTV 5.84% | 65% LTV 5.84% | Uninsured 6.09% | 7.25% | ||
Insured 5.75% | 80% LTV 5.9% | 65% LTV 5.8% | Uninsured 5.8% | 8.1% | ||
Insured 5.4% | 80% LTV 5.55% | 65% LTV 5.45% | Uninsured 5.45% | 5.94% | ||
Insured N/A | 80% LTV N/A | 65% LTV N/A | Uninsured N/A | N/A | ||
Insured 5.25% | 80% LTV 5.25% | 65% LTV 5.25% | Uninsured 5.25% | N/A |
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Hey, homebuyers and homeowners. We have some information we think you’ll find useful. And unlike most secrets, we’re inviting you to share this one with all of Canada.
Banks rarely offer their most competitive mortgage rates up front. This little-known fact often forces Canadians to negotiate discounts over the phone or in person. You don’t need the hassle.
LowestRates.ca tracks the latest mortgage rates in Canada and can help you secure cheap mortgage rates.
Mortgage rate comparison is essential if you want to get a competitive mortgage rate in Canada. By comparing mortgage rates on LowestRates.ca, you can skip the back-and-forth with your bank and get the best rates available in your area right away.
Our users save thousands of dollars a year on their mortgage rates, and we want you to join them. Keep reading to learn how to get the best mortgage rate in Canada.
5.49%
4.54%
7.24%
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In fact, LowestRates.ca mortgage rates average more than two whole percentage points lower than the bank rate. People who use our service have the potential to save thousands of dollars each year on their mortgage payments.
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Each mortgage lender sets rates based on its own prime lending rate. But what is the prime lending rate?
It’s the base interest rate banks charge their customers – typically those with good credit – and it is influenced by the Bank of Canada’s overnight lending rate, which currently sits at 4.75% (as of June 2024). The prime rate itself currently sits at 6.95%, though this doesn’t mean that every bank will use this specific number.
Your lender will give you an annual interest rate on your mortgage that’s based on the prime rate. When the Bank of Canada raises its overnight rate, it gets more expensive for Canadian banks to borrow money. In response, they raise their own prime rates to cover the additional expense.
Other kinds of loans that are affected by the prime rate include car loans, lines of credit and some credit cards.
When you agree to a fixed-rate mortgage, you’ll select a rate based on what lenders are offering at the time and you’ll agree to pay that rate for the duration of your mortgage. Canadian bond yields set the tone for fixed rate mortgages. If the bond yields are on a downward trend, the fixed mortgage rate will also decrease.
A variable rate, on the other hand, is usually determined by adding or subtracting a certain percentage from the prime lending rate. Each lender will determine this percentage on their own. When the prime lending rate goes up or down, the interest rate on a variable mortgage will follow, though the monthly payments will remain the same depending on the type of variable rate you choose.
Mortgage rates are not the same for everyone. Different circumstances and monetary influences can change the mortgage rate of each person applying for it. Here are some of the factors that can affect your mortgage rate in Canada:
1. Credit score: Credit score is an indicator of risk and trustworthiness to lenders. The better your score, the more likely you are to pay down your debt on time. A lower score may mean you have had debt problems in the past and could lead to a higher (or no) mortgage from lenders.
2. Down payment: Putting as high a down payment as possible can reduce your mortgage rate. The rate is calculated based on the borrowing amount. Borrowing less means your rate and/or amortization would be reduced. Lenders want to eliminate risk, and when you invest more of your money into your home, you are naturally reducing their risk.
3. Type of mortgage: The type of mortgage you choose could alter the rate you pay. Generally, people opt for one of the following mortgages:
Fixed rate mortgage: With this option, your payment and mortgage rate stay the same, or remain fixed, throughout your full term. Fixed rates tend to be well above the prime rate.
Variable rate mortgage: If you go for this option, your mortgage rate will fluctuate based on the prime lending rate set by the lender.
Prime rates tend to fluctuate, and variable-rate loans typically fluctuate with them. Variable rates tend to be lower than fixed rates, but there’s always the risk of them fluctuating throughout the mortgage term. Variable rates work best when the prime rate is on the downward trajectory.
4. Bank of Canada’s decisions: As has been seen recently with higher inflation rates, the Bank of Canada will take measures to fight inflation by raising its rate. This, in turn, impacts the lenders, as they will base their rates on the Bank of Canada’s key rates. As of 2023, rates are higher than they have been in decades.
5. Inflation: As inflation either rises or falls, the Bank of Canada will adjust its rates accordingly.
6. Mortgage loan term: Choosing a longer-term fixed-rate mortgage of five or more years allows you to lock yourself into a good rate. You’ll have the security that your rates won’t go up and you’ll know your payments for each month. However, if you choose a one-year fixed-rate mortgage, you have the flexibility to take advantage of lower rates, but you get less security if interest rates rise that year.
7. Location: Larger markets with a high number of lenders may be more competitive, which makes it easier to find better mortgage rates. A smaller community or province with fewer lenders may not have the supply and demand that contributes to competitive pricing.
On LowestRates.ca., you can obtain a quote for a high ratio mortgage or a conventional mortgage. A conventional mortgage refers to one where the down payment is greater than 20% of the purchase price of the home, whereas a high ratio mortgage refers to a mortgage where the down payment is less than 20% of the purchase price of the home. We’ve pulled the average rates from our user database to give you a sense of what you’ll pay on each type of mortgage. While high ratio mortgages often come with lower rates, this is because homebuyers putting less than 20% down are required to purchase mortgage insurance. It’s important to speak with an advisor about which rate structure is right for you.
| Date | Average Conventional Rate | Average High Ratio Rate |
|---|---|---|
| 07/23 | 5.52% | 5.14% |
| 08/23 | 6.07% | 5.41% |
| 09/23 | 6.02% | 5.60% |
| 10/23 | 6.20% | 5.90% |
| 11/23 | 6.19% | 5.78% |
| 12/23 | 5.96% | 5.52% |
| 01/24 | 5.64% | 5.27% |
| 02/24 | 5.36% | 5.09% |
| 03/24 | 5.21% | 4.97% |
| 04/24 | 5.14% | 4.95% |
| 05/24 | 5.18% | 5.00% |
| 06/24 | 5.13% | 4.97% |
Last Updated: July 1, 2024
The type of mortgage you choose should depend on the economic conditions and personal financial situation. Each homebuyer has their own down payment, credit score and loan amount. Also, no two lenders will offer you the same rate and term. So, it is best to compare rates.
There are two types of mortgage rates for you to choose from. A fixed rate interest is set in stone at the beginning of your term and cannot be changed until the term ends and the contract is renewed. The mortgage payment is also fixed through the term.
A variable rate fluctuates according to market conditions. If Bank of Canada reduces its policy interest rate, your variable rate mortgage will decrease too. However, your mortgage payment may or may not change, depending on the type of variable rate you choose.
Between 2020 and 2022, when the prime rate was at its lowest in years, sitting at 2.45%, variable and fixed rates were neck-in-neck here on LowestRates.ca. Borrowers enjoyed low rates and the 5-year-variable rate was the mortgage rate of choice for many borrowers due to low interest.
However, since mid 2021, when inflation kicked into full gear, the Bank of Canada decided to take control. Starting March 2022, when inflation rate peaked at 8.1%, the BoC went on a rate hike spree, aggressively raising its rates at least 10 times until July 2023.
Variable interest rates increased as BoC set its policy rate at 5% while bond yields – which have a direct impact on fixed rate mortgages – saw historical highs too. The 5-year variable rate became much higher and went over the 5-year fixed mortgage rate at the end of 2022. Fixed rate reached its peak in October 2023 and began declining in 2024, making it more affordable for borrowers. The first BoC rate cut in two years came on June 5, 2024, which has given variable rate borrowers little respite. But it is safe to say that shorter term fixed rates are more likeable currently over variable rates.
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Home prices in Canada have seen a downward trend in the first quarter of 2024. While prices are generally sliding sideways across most of the country right now, some cities like Calgary, Edmonton, and Saskatoon reported prices steadily ticked higher since the beginning of last year.
The average value of new mortgage loans in Canada significantly dropped in Q4 2022 because of increasing interest rates and unaffordability.
As the BoC decided to hold rates steady at 5% in July 2023, we can see the average mortgage loan value slightly tick up in Q3 2023 and then dropping again in Q4 2023, probably over expectations that BoC would cut rates soon. The first rate in two years came in June 2024, when BoC dropped 0.25% bringing policy rate to 4.75%. This is likely to lead to increased activity going forward. The rate cut has had a psychological effect for many borrowers who have been sitting on the sidelines waiting for the rates to decrease.
| Geography | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Canada | Q1 - 2019 $258,241 | Q2 - 2019 $256,616 | Q3 - 2019 $274,762 | Q4 - 2019 $276,236 | Q1 - 2020 $278,928 | Q2 - 2020 $289,038 | Q3 - 2020 $297,367 | Q4 - 2020 $313,607 | Q1 - 2021 $323,678 | Q2 - 2021 $343,971 | Q3 - 2021 $364,954 | Q4 - 2021 $350,686 | Q1 - 2022 $361,001 | Q2 - 2022 $366,163 | Q3 - 2022 $363,654 | Q4 - 2022 $325,612 | Q1 - 2023 $320,298 | Q2 - 2023 $314,540 | Q3 - 2023 $338,522 | Q4 - 2023 $327,899 |
Due to BoC interest rate hikes starting March 2022, average monthly mortgage payment for new loans in Canada rose sharply from $1,597 in Q1 2022 to $2,143 in Q4 2023. The dramatic increase in interest rates starting led to this steady and historic increase in mortgage rates. Borrowers who are up for renewal in the coming months will bear the brunt of these high interest rates, especially those who enjoyed lower mortgage rates before 2022.
| Q1 – 2019 | Q2 – 2019 | Q3 – 2019 | Q4 – 2019 | Q1 – 2020 | Q2 – 2020 | Q3 – 2020 | Q4 – 2020 | Q1 – 2021 | Q2 – 2021 | Q3 – 2021 | Q4 – 2021 | Q1 – 2022 | Q2 – 2022 | Q3 – 2022 | Q4 – 2022 | Q1 – 2023 | Q2 – 2023 | Q3 – 2023 | Q4 – 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $1,415 | $1,379 | $1,416 | $1,410 | $1,442 | $1,432 | $1,428 | $1,451 | $1,467 | $1,530 | $1,597 | $1,534 | $1,594 | $1,722 | $1,909 | $1,923 | $1,984 | $1,920 | $2,074 | $2,143 |
If you are searching for lowest mortgage rates in the country, here's something you can do:
Comparison shop: Rate comparison sites like LowestRates.ca help you compare the lowest rates in your area in just a few clicks. It only takes a few minutes to input your financing needs and you’ll receive quotes immediately. It’s free and simple to use.
Good credit score: Banks offer interest rates to their customers based on the credit history. The higher the risk, the more your mortgage rate might be. Maintaining a good credit will show your lender you are a lower risk, which might help reduce your mortgage rate. A better score shows your lender that you are a risk worth taking and could lead to better rates.
Lower your debt: The debt-to-income ratio represents the percentage of your gross income used to pay off debts. The lower your debt ratio the more likely lenders are to lend you money at a better rate.
Increase your down payment: By giving a larger down payment, you can reduce the size of your mortgage and hopefully get a lower rate.
| Month | Fixed | Variable |
|---|---|---|
| 07/23 | 5.30% | 6.38% |
| 08/23 | 5.57% | 6.47% |
| 09/23 | 5.70% | 6.52% |
| 10/23 | 5.92% | 6.52% |
| 11/23 | 5.85% | 6.54% |
| 12/23 | 5.64% | 6.50% |
| 01/24 | 5.41% | 6.39% |
| 02/24 | 5.23% | 6.47% |
| 03/24 | 5.09% | 6.41% |
| 04/24 | 5.02% | 6.39% |
| 05/24 | 5.08% | 6.40% |
| 06/24 | 5.03% | 6.33% |
Last Updated: July 1, 2024
Looking for mortgage info? Check out our Home Buyers Guide.
There are many ways to determine how big a mortgage you can afford. However, there are some guidelines Canadian lenders use when evaluating your eligibility for a mortgage.
Your down payment: How much you are able to put down upfront will inevitably impact how big a mortgage you can afford. This is because there are minimum requirements for a down payment in Canada, depending on the cost of the home.
On a home that’s $500,000 or less, you’re required to put down at least 5% upfront. On a home that’s between $500,000 and $1 million, you’re required to put down 5% of the first $500,000, and 10% of the rest of the principal. On a $1 million home, you’re required to put down at least 20%.
Down payments that amount to less than 20% of a property’s value are called high ratio mortgages and homebuyers need to purchase insurance to guarantee their mortgage. The price of the insurance premium is added to the monthly mortgage payment. Down payments that are at least 20% or more are called conventional mortgages and not require insurance.
Having a down payment that exceeds 20% will help you pay off your loan sooner and save you money in the long run. However, interest rates on high-ratio mortgages tend to be lower than the rates on conventional mortgages. That’s because the added insurance reduces the risk of the bank losing its investment.
Gross Debt Service Ratio: Your GDS ratio refers to the amount of your monthly income you’ll spend on housing costs. The Financial Consumer Agency of Canada uses a standard GDS ratio of 39% as a guideline, though every lender will be a little different. The lower your GDS ratio, the larger the mortgage you may be approved for.
Total Debt Service Ratio: Your TDS ratio refers to the total portion of your income that goes to paying debts and obligations each month. The Canadian Mortgage and Housing Corporation advises maintaining a TDS ratio of less than 42%. Much like your GDS ratio, the lower your TDS ratio, the larger the mortgage you may be approved for.
In Canada, there are a number of different ways to structure a mortgage.
Mortgages can vary depending on the term length, rate type and whether the mortgage is open or closed. Regardless of whether you have a fixed-closed, fixed-open, variable-closed or variable-open mortgage, term lengths can range from anywhere between one year and 10 years. The most common term length in Canada is five years.
Fixed-closed mortgage: A fixed-closed mortgage is a mortgage contract where the rate is fixed and the homeowners are not allowed to pay off their mortgage loan early without incurring a penalty.
Fixed-open mortgage: A fixed-open mortgage is a contract where the rate is fixed, but the homeowners are allowed to pay off their mortgage early without incurring a fee.
Variable-closed mortgage: A variable closed mortgage refers to a mortgage contract where the homeowners have a variable mortgage rate but can’t pay off their mortgage early without incurring a prepayment penalty. The interest rate with this type of mortgage rate will fluctuate depending on market conditions.
Variable-open mortgage: Lastly, a variable open mortgage allows homeowners to pay off their mortgage early without incurring a prepayment penalty. However, the amount that goes toward principal and interest from their monthly payment will fluctuate with market conditions.
Mortgage term: A mortgage term refers to the length of time your mortgage contract is in effect before it is eligible for renewal. Mortgage terms in Canada can range anywhere from one to 10 years, but the most common mortgage term is five years.
Amortization period: The amortization period is the amount of time it will take you to pay off your entire mortgage. In Canada, the maximum amortization period is 35 years. But, if your down payment was less than 20% and you were required to purchase mortgage insurance from the Canadian Mortgage Housing Corporation, then your maximum amortization period is 25 years. The federal government announced that starting August 1, 2024, first-time homebuyers purchasing new builds will be allowed up to 30-year mortgages. Under the Canadian Mortgage Charter, Canadians buying their first newly built home will an additional five years to pay off their mortgage, resulting in lower monthly payments.
The short answer is yes. You can be pre-approved for a mortgage when a lender looks at your finances and informs you of the amount they will lend you and what interest rate they’re willing to offer you. Getting pre-approved for a mortgage can accelerate the process of moving into your new home when you find it. This is because if you’re pre-approved, the seller might choose your bid over another offer.
You’ll want to shop around for the best pre-approval rate you can find. While this can be a challenging and trying process, comparison sites like LowestRates.ca can make it a whole lot easier. Fill out our form to see what brokers are willing to offer you, and a broker will be in touch with you shortly to secure the rate you select on the site.
Payment flexibility needs to be negotiated with your lender at the outset. While some lenders will allow you to change the frequency and amount of your mortgage payments, others will charge fees for these adjustments.
This is why it’s important to think about prepayment privileges when you’re negotiating your mortgage contract. Otherwise, you might find yourself faced with additional fees if you’d like to make these changes down the line.
In addition, you’ll also likely be charged a fee if you choose to break your mortgage. This may happen if you choose to break your mortgage and renew your contract at a lower rate, or if you move before your mortgage has been paid. You can avoid paying a prepayment penalty by looking into securing portability as a feature of your mortgage contract early on.
Given that mortgage rates have been seeing historic highs in 2022 and 2023 because of inflation, Canadian banks have allowed customers to stretch their amortization periods, and as a result, lower their monthly payments. In fact, mortgages can now be amortized for more than 35 years, which wasn’t done before. Of course, extended amortization means higher total interest costs over the life of your mortgage. So, take this into account, if you’re considering stretching your amortization period.
There several different places Canadians can turn to get a mortgage. First, it’s important to identify the difference between a mortgage lender and a mortgage broker.
A mortgage lender lends money to prospective homebuyers directly. They can include a wide range of companies, including banks, trust companies, loan companies, credit unions, caisses populaires and mortgage companies.
A mortgage broker, on the other hand, will not lend money directly to you. Mortgage brokers arrange your transaction by seeking out a lender for you.
While some lenders will only work directly with prospective homeowners, other mortgage products are only offered through mortgage brokers. Since mortgage brokers have access to several lenders at once, they might be able to provide you with a broader range of prospective offers.
LowestRates.ca compares banks, brokers and other lenders all at the same time so you don’t have to go through the trouble. And ultimately, we get you the best mortgage rate from one of our trusted partners. Fill out a form to get started.
Given how hot Canada's housing market is, we can’t overemphasize the importance of mortgage rate comparison.
The mortgage stress test determines if you’ll be able to pay your mortgage if rates were to go up. The federal government introduced the stress test in 2016-17 for mortgage holders who were making a down payment of between 5% and 19% and were required to purchase mortgage default insurance. In 2018, the Office of the Superintendent of Financial Institutions, or OSFI, expanded the stress test to buyers who make a down payment of at least 20% and are uninsured.
Basically, all insured mortgage holders and uninsured mortgage holders who get their mortgage with an OSFI-regulated lender must pass the test.
Mortgage stress tests require prospective homebuyers to qualify for a mortgage rate which is the higher of the following:
The Bank of Canada five-year rate (currently 4.75%).
The rate offered by your lender, plus 2%.
In April 2020, homebuyers applying for insured mortgages (meaning their down payment was less than 20% of the value of the property), only had to quality for the higher of the following:
The weekly five-year rate on all insured mortgages, plus 2%.
The rate offered by your lender, plus 2%.
In June 2021, the most recent update, OSFI decoupled the minimum qualifying rate from the central bank’s posted rate. It has now a set floor rate of 5.25% that the regulator will review annually.
By requiring buyers to qualify at a higher rate than they might be offered by their lender, the stress test makes it more difficult for Canadians to get a mortgage. It can reduce the mortgage amount you qualify for or require you to save more money for a larger down payment.
Shivani Kaul
About the Author
Shivani Kaul is a content manager in the personal finance space. Prior to this, she worked as a digital editor with Pagemasters North America (a division of The Canadian Press) for four years. Shivani has also worked as a freelance writer and editor for Investor's Digest of Canada and The Ghost Bureau.
She has more than a decade of experience working as an editor and writer for different news media organizations in Canada and South Asia. She has a Digital Marketing Management certification from the University of Toronto, a Master's degree in Mass Communication (Journalism) and a Bachelor's degree in English from the University of Delhi (India).
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* Based on the difference between estimated deep-discount 5-year fixed rates from Canada's top six banks and the lowest comparable rates on LowestRates.ca, as of January 14, 2022.