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Current mortgage rates from Canada’s Big Six banks
Rates updated: September 30, 2024
Bank |
2-Yr Fixed Rate |
3-Yr Fixed Rate |
5-Yr Fixed Rate |
5-Yr Variable Rate (Closed) |
|---|---|---|---|---|
| 6.99% | 6.54% | 6.49% | 6.45% | |
| 6.79% | 6.99% | 6.84% | 6.45% | |
| 6.84% | 6.54% | 6.44% | 6.45% | |
| 6.84% | 6.50% | 6.39% | 6.45% | |
| 6.89% | 6.54% | 6.49% | 6.90% | |
| 7.34% | 6.94% | 6.79% | 6.60% |
Posted rates for closed mortgages with amortization under 25 years. Data source: Canada's major banks
Current mortgage rate update: November 6, 2024
The big question this week is whether the U.S. election results might have an impact on Canadian mortgages. It might.
Canadian bond yields, which determine fixed mortgage rates, often follow their U.S. counterparts. The yields on three- and five-year Treasury bonds were up within hours of Trump’s election win, a sign that investors are selling bonds and gravitating toward more growth-oriented investments. If that trend continues, the yields on Canadian government bonds should rise, too. (They crept up on November 5, but not to the extent U.S. yields rose on November 6.)
Lenders may feel pressured to raise their fixed mortgage rates if three- and five-year bond yields increase further. If fixed rates stay where they are, however, home buyers have some fairly approachable options to choose from. As of November 6, both five-year fixed mortgage rates and three-year fixed mortgage rates are a hair above 4% at several brokerages.
Variable mortgage rates remain stable, and aren’t likely to change until the next time the Bank of Canada reduces the overnight rate. That’s likely to happen in December.
Some mortgage brokerages are offering variable mortgage rates for 4.75%. Variable rates will be considerably higher at Big Six banks, so consider reaching out to a broker if you’re hunting the best deal.
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Current prime rates
A lender’s prime rate is typically used to set variable mortgage rates.
If you’ve ever visited a bank’s mortgage rate page, you may have seen its variable mortgage rates explained as “prime minus X%”.
As you see in the table, the prime rate at all Big Six banks is identical. That’s because each bank bases its prime rate on the Bank of Canada’s overnight lending rate.
It’s worth noting, however, that TD is unique among these lenders in that they have their own prime mortgage rate, which is currently 6.70%.
| Institution | Prime rate |
|---|---|
| BMO | 5.95% |
| CIBC | 5.95% |
| National Bank | 5.95% |
| Scotiabank | 5.95% |
| RBC | 5.95% |
| TD | 5.95% |
Current mortgage rates: Trends to watch in 2024
Will fixed mortgage rates fall in 2024?
As interest rates continue trending down and bond prices solidify at lower levels, fixed mortgage rates should also become more affordable.
It ultimately depends on lenders, who tend to raise fixed rates much faster than they decrease them. Bond yields sank rapidly throughout July 2024, for example, but fixed rates held relatively steady throughout the month.
Will variable mortgage rates fall in 2024?
After the Bank of Canada cut its overnight rate to 4.5% on July 24, the question is how much will variable rates decrease over the remainder of 2024.
The Bank isn’t likely to reduce the overnight rate as aggressively as it jacked it up. Doing so might pump a little too much fuel into the economy, which could trigger another ramp-up in inflation. If the Bank’s July cut leads to neutral or positive results, we might be able to expect another two modest cuts before the end of the year.
Fixed vs. variable mortgage rates
Choosing between fixed- and variable- rate mortgages means choosing which features you value most.
If you want the lowest current rate: Fixed-rate mortgages historically have lower rates than a variable mortgage of the same term.
If you think rates will fall during your term: Variable-rate mortgages let you take advantage of dropping rates. The question is when and how much rates may drop during your term. If you’re paying a higher rate out of the gate for a variable mortgage, your break-even point won’t occur until some time after rates go down.
If you have a tight budget: You can lock in a mortgage payment with a fixed-rate mortgage. If rates go up with a variable-rate mortgage and you don’t have wiggle room in your budget, you could put your home at risk.
If you think you’ll prepay: You’ll generally pay a lower prepayment penalty on a variable-rate mortgage than on a fixed-rate mortgage.
Mortgage terms to know
Fixed mortgage rates
A fixed mortgage rate will not change for the entirety of your mortgage term, which is how long your current mortgage contract is in effect. Even if mortgage rates rise or fall during your term, the rate attached to your mortgage will not change — nor will the principal and interest portions of your mortgage payment.
Variable mortgage rates
A variable mortgage rate could rise or fall during the mortgage term. That’s because variable mortgage rates are based on lenders’ prime rates, which increase or decrease whenever the Bank of Canada adjusts its overnight rate.
Posted rates
These are a bank’s publicly advertised mortgage rates. They’re higher than its special rates. One theory behind why posted rates are so high is that they are intended to be negotiated down during mortgage discussions to make borrowers feel as if they scored a great deal. And if a borrower doesn’t negotiate, the bank can charge the full posted rate and make more money.
Special rates
These are posted rates that have been discounted. Some banks’ discounted rates are also the rates they offer their mortgage broker partners.
APR
Many lenders publish mortgage interest rates alongside corresponding annual percentage rates (APR). An APR includes any additional fees the lender may charge, so it’s a more accurate indication of what a mortgage might cost. When comparing current mortgage rates among lenders, always try to compare APRs to get a more accurate sense of what each loan might cost you.
Nerdy Tip: Make yourself familiar with a bank’s posted and discounted rates to put yourself into a stronger negotiating position. No matter how well you prepare yourself, however, know that the rate you’re offered will ultimately depend on your financial situation.
Current mortgage rates and the stress test
In addition to affecting the cost of your home loan, current mortgage rates also impact how much mortgage you can qualify for by influencing the mortgage stress test.
If you’re applying for a mortgage at a federally regulated financial institution, the stress test requires you to qualify at either 5.25% or the rate being offered plus 2%, whichever is higher. If a lender offers you a rate of 5%, for example, your finances would have to support the same loan at 7% for you to qualify.
If that’s not the case, your lender will reduce the amount you’re offered until you can pass the stress test at the qualifying rate.
Do these 3 things for a better mortgage rate
Boost your credit score
A credit score of 680 or higher will help you get approved for a mortgage at most Canadian lenders. With a longer list of lenders willing to work with you, you’ll have more offers to choose from — and a better shot at being offered the best mortgage rate.
Before applying for a mortgage, check your credit score. If there are some financial habits you can tweak to improve your credit score, get tweaking.
If your credit score is below 680, you should still be able to apply for a mortgage with a B lender.
Pay down debt
If you’re carrying debt from a credit card, personal loan or line of credit, lenders may question your ability to afford a mortgage payment. Any risk they see could give them a reason to offer you a higher rate.
Negotiate
Don’t accept the first rate offer you’re presented with.
Negotiating is a must during the mortgage process. Even if your lender isn’t willing to decimate its rate offer for you, getting a little shaved off your rate can make a significant difference.
Here’s a quick example using a mortgage of $400,000.
- At 5% interest, your monthly mortgage payment would be $2,326.
- At 4.8% interest, your monthly mortgage payment would be $2,281.
In this case, a few minutes negotiating a slightly lower rate could save you about $50 every month.
Frequently asked questions about current mortgage rates
Fixed mortgage rates aren’t expected to dip any further in 2024. Based on bond activity in the last half of October, they might actually increase a little. Variable mortgage rates will continue decreasing each time the Bank of Canada lowers its overnight rate. There could still be another rate cut coming before the end of 2024.
As of November 2024, 5% would be significantly higher than what many banks and brokerages are offering on three- and five-year fixed-rate mortgages. You’re unlikely to find a rate of 5% on shorter fixed-rate terms. For a variable-rate mortgage, you might pay more than 5% for the rest of the year if you get your mortgage from a Big Six bank.
When getting a mortgage, you can go directly to a lender, like a bank, or work with a mortgage broker.
Generally speaking, a mortgage broker should offer you a wider array of options. Unlike a bank’s mortgage advisors, brokers aren’t tied to a single financial institution. They can field offers from multiple lender partners, which might include B lenders and private lenders, in addition to some Big Six banks.
Part of a mortgage broker’s job is to negotiate a better rate for you. They only earn a commission when a mortgage is finalized, so it’s in their best interest to negotiate a mortgage you can afford to sign. Bank employees with revenue targets, however, may not feel quite as motivated to cut you a deal.
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