Compare Today’s Lowest 5-Year Variable Mortgage Rates
Your Guide to Getting the Best 5-Year Variable Mortgage Rates
If you are searching for the best 5-year variable mortgage rates, comparemortgages.ca is the top choice for borrowers across Canada. We have the resources and understanding of mortgages that can help you complete the process of securing a mortgage in Canada. When opting for a variable-rate mortgage, you could face changing interest rates during its duration.
Compare 5-Year Variable Mortgage Rates
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Securing Canada’s most favourable mortgage or loan terms starts with comparing rates from big banks. Interest rates and promotional offers can vary significantly, potentially leading to substantial savings over the life of your loan.
Take Action Today:
- Explore Multiple Options: Don’t settle for the first offer. Research rates from various top lenders and banks across Canada to identify the most competitive options.
- Consider Your Financial Needs: Assess your budget, financial goals, and risk tolerance to determine the loan term and type that best suits you.
- Make an Informed Decision: With comprehensive rate comparisons, make a confident choice that matches your financial needs.
Comparing rates can translate to significant savings and a more favourable financial future.
Benefits of Variable-Mortgage Terms
For those looking to save money over the long run, variable-rate mortgages are worth considering. The potential cost savings are quite substantial: lower rates mean interest payments will amount to less throughout the mortgage, and if you need to break the mortgage, there’s no hefty IRD penalty, only a three-month interest payment charge. That being said, it’s important to take into account that fluctuations in rates also have their cons; as rates can go up, so too can your loan payments.
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The popularity of the 5-Year Variable-Mortgage Rate
Choosing the right mortgage term is important in navigating financial freedom. Many people look to a 5-year variable rate mortgage as the way to go for its many advantages, including flexibility and sometimes lower rates than fixed-rate mortgages. While historically, 5-year fixed-rate mortgages have more consistently been a more popular choice than variable, data from over the last 25 years shows that consumers can save slightly more money on average with variable mortgage solutions. This may be due to lenders offering comparatively low rates on variables since they are less risky to them. In short: A 5-year variable rate mortgage is a great choice and one of the most popular today.
What drives changes in 5-year Variable mortgage rates?
While fixed rates remain the same for a mortgage term, variable rates change according to a benchmark set by the lender. This is generally based on the Prime Rate plus or minus a certain amount. When the Bank of Canada’s key rate changes, the benchmark usually moves in the same direction. This is because the lender now has to pay more (or less) to cover the cost of the capital used to fund your mortgage. Hence, if the BoC’s key rate rises, variable rates are likely to rise in turn.
Frequently Asked Questions
To learn more about 5-year variable rate mortgages, you can review Canadians’ most common questions about this type.
What is a 5-year variable mortgage rate?
A variable rate means the interest rate can fluctuate for the duration of your mortgage term according to changes in the lender’s Prime rate. A fixed rate on the other hand, remains the same throughout your term.
How are 5-year variable rates set?
The Bank of Canada’s baseline interest rate determines how variable rate mortgages are set. A rise or fall in BoC’s rate would cause a change in variable rates.
What are the differences between fixed and variable rates?
A fixed-rate implies that your interest rate remains constant throughout the entire duration of your term. On the other hand, a variable rate would still see changes or fluctuations in interest rates for the course of your mortgage term.
Is it a good idea to refinance a 5-year variable mortgage?
Refinancing a 5-year variable mortgage can be an excellent decision if it enables you to secure a better rate and the long-term savings exceed any up-front costs. However, you should always consider why it’s a good idea for you and ensure that the costs involved will be manageable. As with all mortgage refinances, there may be certain fees, such as prepayment penalties, that could make refinancing less appealing. Therefore, take the time to weigh all your options to make an informed decision before refinancing your 5-year variable mortgage.
If I see a 5-year variable mortgage rate I like, how do I lock it?
You can call your lender and discuss the rate. Typically, a lender offers what is known as a mortgage rate lock period. Typically, a 3-month period allows you to freeze this rate.
Final Thoughts
You need to compare the rates available to you so you can go with the one best suited to your financial condition. Make sure to consult a mortgage professional to decide the best route.