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Best Mortgage Rates in Canada

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Find and Compare the Best Mortgage Rates in Canada

Buying a home is a big step. Getting the right type of mortgage at the best possible rate can save you thousands of dollars and make home-ownership much more affordable.

Shopping for the best mortgage rate is time consuming. That’s why Insurdinary has simplified the process for you by providing a list below of Canada’s top mortgage brokers and lenders.

All mortgage rates below have been provided by Homewise to Insurdinary. Homewise is a Canadian mortgage broker that is partnered with top lenders across the nation. All of the rates shown are direct from Homewise’s partners and are updated on a daily basis to ensure you are receiving the most accurate and up-to-date options.

Best 5-Year Fixed Mortgage Rates in Canada (or Variable)

Let Us Help You Secure a Mortgage RateThat Is Aligned With Your Budget

Insurdinary is proud of our partnership with Homewise. Together we provide you with the best mortgage offers and rates in Ontario, British Columbia, Alberta, Saskatchewan, Newfoundland and Labrador, Nova Scotia and New Brunswick. After a few simple questions, you will get access to the rates of over 30 top lenders to save you money.

Don’t just settle for any mortgage. Find one that includes repayment policies and interest rates that don’t impact the overall cost of your home, or gauge your monthly finances.

Each online mortgage lender displays and highlights information differently on their websites. Sifting and clicking through multiple pages from several lenders, taking notes and crunching numbers is very time-consuming, not to mention a complicated effort. This is precisely why we aimed to simplify the process of shopping for a mortgage rate in Canada. Using this platform you can now:

  • Utilize our free mortgage rate calculator
  • Understand the type of mortgage that’s right for you
  • Analyze Canada’s most affordable lenders
  • View side-by-side comparisons based on your unique criteria
  • Complete an official mortgage application
  • Learn about many different types of mortgages available in Canada
  • Find information on other financing and insurance options available
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What Is a Good
Mortgage Rate?

The simple answer is, a good mortgage rate in Canada is the most affordable possible rate you are able to qualify for based on the total amount borrowed and mortgage type you need.

The complex answer requires some historical context. The average conventional lending rates for loans according to Statistics Canada using 5-year terms as an example, was 7.18% for 2001, 4.57% for 2011 and 3.28% for 2021.

A simple calculation shows that a 5% mortgage rate would have been optimal in 2001, but not ideal in 2021. 2022 is expected to see interest rates climb even more as the Bank of Canada will likely have to adjust them due to inflation. However, historical data over the last 40 years indicate that current rates are still relatively low in comparison.

The rate a mortgage lender advertises won’t necessarily be the one you secure. Keep in mind that your actual rate will be calculated based on your credit score and other financial factors.

Why compare mortgage rates before applying?

Your mortgage is likely going to be the largest loan you will ever carry in your life. Finding a mortgage rate that keeps your payments manageable is critical to having a financially balanced lifestyle, especially in today’s economy.

Securing a low mortgage rate saves you funds, meanwhile a high mortgage rate costs you plenty. It’s important to keep in mind that when comparing multiple lenders there are other factors you should determine before making your decision. Consider their overall reputation, cost of penalties, portability and also their client services.

Understanding your individual mortgage needs, careful consideration and research and most importantly, comparing rates is the best course of action to enter into a mortgage that fits your budget.

What’s the best way to compare mortgage rates across lenders?

Although comparing mortgage rates across lenders does have a great deal of convenience and simplicity to it, there are some important steps involved that require a little bit of prep work.

The first critical step is to not only compare interest rates but annual percentage rates as well. These steps will walk you through the process:
  1. Divide the total amount of funds by the loans total amount
  2. Multiply that total by the number of days in the year
  3. Divide that total by the number of days in the loan's term
  4. Lastly, multiply that total by 100 and include a percentage sign (%)
In order to get a more accurate calculation of what your actual mortgage will be, take a look at the APR. For example:
  • Company A: 3% interest rate on a 5-year fixed mortgage - 3.25% APR
  • Company B: 3% interest rate on a 5-year fixed mortgage - 3.175% APR
When looking at mortgage rates, take care to compare identical mortgage products, terms and amortization periods. Other important considerations when comparing mortgage rates across lenders include fees (like home appraisal fees), prepayment penalties, portability, the ease of the application process and a lender’s customer service ratings.

What factors determine a mortgage rate?

The overall health of the Canadian economy is a major factor in determining mortgage rates. The inflation rates have a huge impact. Outside of that, all other determinations are made based on the individual's financial and personal situations. For example, credit score and income, amount of downpayment, chosen interest rate, and chosen amortization and mortgage term.

What is considered a good credit score?

The Canadian credit score system ranges from poor (300) to excellent (900). Typically a score of 660 is considered good and will likely result in a mortgage approval. Bear in mind that not all lenders follow these parameters. They may have their own individual rules.

It’s possible to secure a mortgage with a credit score of 600 from some financial institutions, but most will offer you a mortgage with a score of 680. For those who put down less than 20%, they would be required to purchase default insurance, for which the minimum credit score is also 600.

CMHC (Canadian Mortgage and Housing Corporation) states that only one person who’s taking the mortgage out requires a credit score of at least 600. So if you’re in a relationship with someone who has a lower score, it won’t affect your ability to borrow.

How do I qualify for the lowest mortgage rate?

Although individual lenders may have their own mortgage borrowing criteria, there is some way to further ensure you are getting the lowest rate:
  • Good to excellent credit score
    • necessarily be offered the best rates). Those with a credit score of 680 or higher will generally receive the lowest mortgage rates because they are low-risk borrowers. Those who have lower credit scores are seen as high-risk borrowers and may not receive the best rates.
  • Debt Services Ratios that are Manageable
    Total Debt Service (TDS) and Gross Debt Service (GDS) are two key ratios that mortgage lenders will analyze when determining the best rates.
    Your GDS ratio typically should not exceed about 32% of your yearly gross income. GDS is the percentage of pre-tax household income that is put towards costs such as property taxes, utilities and mortgage payments.
    Your TDS accounts for all of the other debts you are carrying such as credit cards, car, student and personal loans, but also includes your GDS. The total amount of your TDS should not exceed 44%. You have a much better chance of being granted a mortgage if this ratio is kept as low as possible.

Types of Mortgages Available in Canada

When searching and comparing mortgages, it’s important to know the types of mortgages available and what the differences are.

They can vary in speed of repayment, interest rate, and whether that interest rate changes or remains the same over time. When you understand the features of each type of mortgage, you’ll know you’re comparing equivalent options.
Here are the different types of mortgages to consider:

Fixed Rate Mortgage

The interest rate is set, so you’ll have predictable monthly payments.

Adjustable Rate Mortgage

The interest rate fluctuates and is based on the type of loan you get.

“Balloon” Mortgage

Typically short-term, low payments, and often interest-only.

Interest-Only Mortgage

You only pay interest for a set period of time.

Reverse Mortgage

For seniors only. Gives you access to your home equity’s line for credit.

Government-Backed Mortgage

Lending option that includes loans supported by government entities to help more people buy homes.

Combination Mortgage

80/20 combination home that helps you avoid taking out insurance on the full amount.

Second Mortgage

Otherwise known as a “home equity loan”. Typically has a high interest rate.

Canada's Mortgage Rates Historical Data

As discussed above, mortgage rates fluctuate. Statistics Canada has reported monthly conventional lending rates for 5-year terms, over the last 5-year period. These fluctuations can be seen on the chart below.
Here are the 5-Year Mortgage Rates:
2021 MORTGAGE RATE
JAN FEB MAR APR
3.30% 3.25% 3.26% 3.25%
MAY JUN JUL AUG
3.25% 3.26% 3.20% 3.20%
SEP OCT NOV DEC
3.22% 3.29% 3.40% 3.45%
2020 MORTGAGE RATE
JAN FEB MAR APR
4.08% 4.08% 3.90% 3.95%
MAY JUN JUL AUG
3.86% 3.77% 3.64% 3.57%
SEP OCT NOV DEC
3.51% 3.45% 3.42% 3.34%
2019 MORTGAGE RATE
JAN FEB MAR APR
4.59% 4.52% 4.44% 4.33%
MAY JUN JUL AUG
4.30% 4.23% 4.14% 4.08%
SEP OCT NOV DEC
4.07% 4.09% 4.09% 4.08%
2018 MORTGAGE RATE
JAN FEB MAR APR
4.14% 4.26% 4.27% 4.27%
MAY JUN JUL AUG
4.35% 4.32% 4.42% 4.43%
SEP OCT NOV DEC
4.43% 4.48% 4.38% 4.59%
2017 MORTGAGE RATE
JAN FEB MAR APR
3.73% 3.75% 3.66% 3.62%
MAY JUN JUL AUG
3.59% 3.60% 3.72% 3.82%
SEP OCT NOV DEC
3.89% 3.98% 4.04% 4.07%

Mortgages - 
Frequently Asked Questions (FAQ)

Many home buyers have unanswered questions when it comes to getting a mortgage. This can be a costly mistake if it leads to choosing the wrong option.

Our FAQ section below will help you better understand your options and decide on the mortgage that best fits your needs.

What are fixed and variable mortgages?

Fixed-rate mortgages have a set interest rate for the life of the loan. Regardless of economic fluctuation, you pay the same interest rate. A variable-rate typically remains the same for an initial term, then resets based on the current market rates. This means your variable rate could go up or down, affecting the size of your payment or how much of the payment is applied to the principal.

Some lenders offer a protected variable rate. After the initial term, the interest rate changes according to the market but it cannot exceed a predetermined cap rate. There may also be a predetermined minimum rate, in the event that market rates drop.

Fixed-rates are often slightly higher than variable rates. This is because interest rates are assumed to increase over time, so the variable rate will likely increase when it resets. The lenders estimate in an effort to balance the two.

What is the mortgage "term"?

Not to be confused with the “amortization period” (which is the entire time it takes to repay the mortgage), the “term” is the initial period before rates and other agreed-upon elements of the mortgage can change. This can be anywhere from 6 months to 5 or more years. After the term ends, interest rate and payment arrangements may be renegotiated if you find something more in your favor.

What are open and closed mortgages?

In an open mortgage, you are free to pay off the mortgage at any time, with no penalties. You can also renegotiate the mortgage at any time. A closed mortgage has a set amortization period and paying early will result in prepayment penalties.

You can save substantial amounts of interest by paying an open mortgage off early but they typically come with higher interest rates. If you plan to pay your mortgage more quickly than the required, make sure the interest saved by prepayment makes up for the higher interest rate.

How much is a typical down payment?

Although some lenders and programs can work with much smaller amounts, the typical down payment is 20% of the home’s price. If you’re able to get a mortgage with less than 20% down, you’ll be required to purchase CMHC mortgage insurance, which protects the lender if you default on the loan. Make sure you consider this cost when you compare rates.

In addition to the down payment, remember to plan for closing costs. Closing costs include legal fees, land transfer fees, property taxes, and other costs that must be paid as part of the closing process on your home purchase. These can add up to 3-4% of the sale price of the home.

What is mortgage default insurance and how much will it cost?

Mortgage default insurance is required when paying less than 20% down on a mortgage loan. This is required by law, and not under the control of the individual lender.

Mortgage default insurance protects the lender in the event of a default by paying the remaining debt. It reduces the risk to lenders, allowing them to offer home mortgages to more people at a lower interest rate than would be possible if the risks were higher.

The cost of mortgage default insurance is between 2.80 and 4.00% of the price of the home. However, unlike most closing costs, mortgage default insurance is built into the mortgage and financed over the life of the loan. It increases the total cost of the home and the size of the monthly payments but does not require a lump sum of cash at closing time.

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