Compare Today’s Lowest 5-Year Variable Mortgage Rates

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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

Below is a table displaying the best rates from the five largest banks in the country. You can easily compare the rates offered by major Canadian lenders and banks, including TD Bank, RBC, CIBC, HSBC, and Scotiabank. We take care of the research to guarantee you the lowest possible rates upfront every time.

Comparing Bank Rates

It can be time-consuming and frustrating to compare rates by yourself. With us, you can find everything you need in one convenient location. Also, ensure that you consider the mortgage product term length and type when comparing rates. For instance, if you are in the market for a fixed-rate mortgage, it is essential to examine the range of terms given by various banks, such as three-year and five-year offerings, and not just the interest rate.

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.