Compare the Best Mortgage Rates in Canada

Discover the lowest rates from the top 20+ banks, lenders, and mortgage providers in Canada.

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Step-by-Step Guide

How to Find & Compare Mortgage Rates

Are you looking for the best mortgage rates in Canada? Comparing mortgage rates from banks & lenders can be a difficult task. With so many options available, it’s essential to understand how to compare mortgages and what type of rate will best suit your financial situation. This step-by-step guide will provide tips on finding and comparing mortgage rates in Canada.

Step 1: Use our rate tool to browse the lowest rates in Canada

Our mortgage rate comparison tool will show you the best rates from over 20 banks and lenders. Simply enter your criteria, such as down payment amount and home price, to see the best mortgage rates available in Canada.

Step 2: Research different types of mortgages

Different types of mortgages offer different benefits and drawbacks. Before selecting a mortgage product, research the best option for you. For example, a variable-rate mortgage could typically offer a lower rate than a fixed-rate mortgage but comes with more risk.

Step 3: Compare interest rates and terms

Once you’ve identified which type of mortgage best suits your needs, it’s essential to compare mortgages from different lenders to find the best rate. Compare interest rates, terms, and any additional fees that may be associated with the mortgage. It is prudent to compare the cost of borrowing between options to see how their interest-carrying costs will compare. Comparing total interest-carrying costs over terms and amortizations can help you understand the actual costs of one mortgage solution over another.

Step 4: Contact a mortgage broker or lender

Finally, contacting a mortgage broker or lender is best to discuss your options and get the best mortgage rate. A broker or lender can help you determine the best way to compare mortgage rates, answer questions about different mortgage products, and even guide you in choosing the best mortgage for your financial situation.

Always speak to a mortgage professional before making a decision on your mortgage rate. We’re here to help!

How do Mortgage Rates Work?

Mortgage rates are set by lenders and vary depending on the mortgage product, the current market conditions, and your financial situation. Interest rates for mortgages can range depending on the lender and type of mortgage. More importantly, they are tied to the risk you represent to the lender in the form of ratios. The lender will review your debt-to-income and loan-to-value ratios and provide you with the correct rate. Variable rates are typically tied to a benchmark rate such as the lender’s prime rate or, in the case of fixed rates, Bank of Canada’s bond yields.

When you compare mortgage rates, it’s essential to consider more than just the interest rate. Different lenders may offer different mortgage terms and additional fees that can affect the overall cost of your mortgage over time. Be sure to compare all aspects of each loan by reviewing the cost of borrowing before selecting a solution that fits your needs.

What is a good mortgage rate?

A good mortgage rate is usually the lowest possible rate you qualify for, based on the type of mortgage you want and the amount you need to borrow. But the best rate doesn’t let you compromise any features you’re looking for in your solution.

Mortgage rates climbed in 2022 and are expected to increase in the first half of 2023 as the Bank of Canada continues to look at fighting inflation. Historically, mortgage rates remained low between 2009 and 2021 and began to climb between 2021 and 2023 due to rising home prices and accelerating inflation. In the early 1980s, mortgage rates were around 18%, dropping to 12% by the early 90s. While today’s rates continue to climb, they are still considered relatively low by historical standards.

How to Get a Mortgage in Canada

A home is likely the largest purchase you’ll ever make, and a mortgage payment can comprise your most significant reoccurring financial obligation. Preparing for the mortgage application process will pay off—literally! You could save hundreds of dollars each month with better loan arrangements or even tens of thousands over its life. These savings that should not be overlooked when considering a suitable mortgage solution. Getting your loan’s best terms and conditions will ensure greater security in shorter-term budgeting and longer-term financial well-being.

  • Build your credit score
  • Calculate how much home you can afford
  • Set a budget for your down payment and monthly mortgage payments
  • Compare current mortgage rates
  • Choose the right lender
  • Get pre-approved then search for a realtor
  • House hunt until you’re certain you’ve found the one
  • Apply and get approved for a mortgage
  • Pay closing costs and close on your home

Choosing Your Mortgage Type

Fixed vs Variable Rates in Canada

When selecting a mortgage type, most Canadian homebuyers consider two options: fixed or variable. A fixed-rate mortgage is best for buyers who want to secure the same interest rate and payments throughout their loan term. A variable-rate mortgage could offer lower rates than a fixed-rate mortgage but comes with more risk as interest rates can change over your term. Consider your budget and goals to determine best which option suits your needs.

Choosing Your Mortgage Term & Amortization Period

In choosing between fixed or variable mortgage rates, you must also decide on a term length and an amortization period. The mortgage term is the length of your mortgage agreement with a lender—this can range from 1-10 years, depending on your needs. Your rate, or discount from the lender’s prime rate in the case of a variable-rate mortgage, will remain unchanged during your term. Your amortization period will help you calculate how much time it will take to pay off your mortgage. The best mortgage rate will also depend on your choice of term length and amortization period.

Choosing Your Amortization Period

An amortization period is a time it takes a borrower to pay back the complete loan principal plus interest. The most popular amortization periods in Canada are 20, 25 and 30 years, although other terms may be available depending on your situation. Choosing a shorter term or larger down payment will help reduce the total amount of interest paid over the life of the loan. A mortgage professional can help you determine the best amortization and mortgage term combination for your situation.

Mortgage Terms Offered in Canada

The mortgage term is when you agree to be contracted for a set time with the same lender. Many lenders offer a variety of terms, usually ranging from 1 year to 10 years or more. Generally, mortgages with shorter terms have lower interest rates than those with longer terms. Consider how long you plan on staying in your home and how much you can afford in monthly mortgage payments when choosing a term.

Why the 5-year mortgage rate is most popular in Canada

Canada’s residential mortgages amounted to a staggering $1.4 trillion in May 2022, with the 5-year fixed rate mortgage comprising almost half of this figure at 44%, or over $624 billion. There is more money borrowed on a 5-year fixed-rate mortgage than all money on fluctuating rates such as variable-rate mortgages and HELOCs combined! The overwhelming popularity of this mortgage type has prompted CMHC to qualify and stress test borrowers on the Bank of Canada’s 5-year benchmark rate.

Why 1, 2 & 3-year mortgage rates are becoming more popular in 2023

The shorter-term 1, 2 and 3-year mortgage rates are becoming more popular in 2023. Their popularity is mainly due to the expectations that the Bank of Canada will curb inflation making rates come down once again. Many homebuyers and homeowners are choosing this term to ride out inflation before renewing into a better longer-term mortgage. These shorter terms also offer increased flexibility over extended periods, allowing homeowners to adjust their mortgage if their financial situation or goals change.

Interesting in learning more about popular rates? Compare mortgage rates and an expert can help!

Historical Mortgage Rates in Canada

Historical mortgage rates have varied dramatically over the years in Canada. Historically, mortgage rates ranged from 21% in 1980 to ~2% in 2021. Below is a graph showing mortgage rates between 2000-2023.

mortgage-rates-banks-2000-2023-

source: bankofcanada.ca

Mortgage Rate Frequently Asked Questions

Why is it important to compare mortgage rates in Canada?

Comparing mortgage rates is important in order to get the best rate for your home loan. Different lenders offer different mortgage products with different interest rates and fees, so it’s best to compare them all before committing to a particular lender. It’s important to call at least 2 lenders to make sure you understand the rates, fees, and products being offered.

How can I lock in my mortgage rate and for how long?

Most lenders offer rate hold periods between 60-120 days to allow borrowers time to secure financing. During this period, your mortgage rate is guaranteed and cannot change, even if interest rates rise in the interim.

What other fees should I consider when comparing mortgage rates?

It’s important to compare the costs associated with a mortgage, such as closing costs, administration fees, and legal fees. These can vary significantly between lenders, so it’s best to inquire about them before signing any agreements. Some lenders may also offer discounts or credits that you can take advantage of. It’s best to compare all fees and charges before making your decision.