Best Mortgage Rates Canada 2025

Compare current fixed and variable mortgage rates from Canada's top lenders — updated regularly.

Current Canadian Mortgage Rate Snapshot (2025)

Canada's mortgage market entered 2025 in a significantly different position than it was just two years ago. After the Bank of Canada hiked rates aggressively to combat inflation, 2024 brought five consecutive rate cuts, pushing the overnight rate lower and providing relief for variable-rate borrowers. Heading into 2025, the prime rate sits at approximately 5.45%, and fixed rates have responded — though not as dramatically as many homebuyers hoped.

Here is a general snapshot of where mortgage rates stand in early 2025 across the major product types:

Mortgage Type	Approximate Rate Range	Notes
5-year fixed	4.49% – 5.49%	Most popular product in Canada
3-year fixed	4.29% – 5.09%	Good if you expect rates to drop further
2-year fixed	4.19% – 4.89%	Short commitment, higher flexibility
1-year fixed	5.09% – 5.79%	Typically not the cheapest option
Variable rate	4.45% – 5.10%	Prime minus 0.50–1.00%
HELOC	5.45% – 6.70%	Usually prime + 0–0.50%

Why Rates Vary Between Lenders

Not all Canadian lenders quote the same rate for the same product. A Big Six bank (RBC, TD, Scotiabank, BMO, CIBC, National Bank) often advertises a "posted rate" that is significantly higher than what they will actually offer a qualified borrower. The gap between posted and discounted rates can be 1–2%. This is why mortgage brokers are so valuable — they access dozens of lenders and can negotiate on your behalf.

Monoline lenders (lenders who only do mortgages, like First National, MCAP, or Merix) often offer the most competitive rates because mortgages are their only business. Credit unions also frequently compete on rates and offer unique products for self-employed borrowers or those with bruised credit.

Fixed vs. Variable: Which Is Better in 2025?

This is the most common question Canadian borrowers face. In 2025, the answer depends heavily on your risk tolerance, your financial runway, and your belief in the Bank of Canada's rate trajectory.

• Fixed rate: Predictable payments, peace of mind, ideal if you are near your borrowing limit
• Variable rate: Historically cheaper over long periods, but payments (or amortization) change with prime rate moves
• Hybrid mortgages: Some lenders split your mortgage — half fixed, half variable — for a middle-ground approach

Many economists expect the Bank of Canada to continue modest cuts through 2025, which could make variable-rate mortgages more attractive over a 5-year term. However, if global inflation surprises to the upside, variable-rate holders could see rates rise again.

How to Get the Best Mortgage Rate in Canada

Getting the lowest possible rate requires preparation. Lenders reward borrowers who represent low risk with better pricing. Here are the key factors that influence your rate:

• Credit score: A score of 680+ qualifies for most products; 720+ gets the best rates
• Down payment size: 20%+ avoids CMHC insurance and qualifies for conventional rates
• Employment stability: Salaried employees typically qualify more easily than self-employed
• Debt-to-income ratio: The lower your existing debts, the more you can borrow and the better your rate
• Property type: Single-family homes get better rates than condos or rural properties
• Amortization: 25-year amortizations often get better rates than 30-year

The Stress Test and Its Impact on Qualifying

All federally regulated lenders in Canada require borrowers to qualify at the greater of their contract rate plus 2%, or 5.25% — whichever is higher. In practical terms, if you're offered a 5-year fixed rate of 4.74%, you must prove you can handle payments at 6.74%. This stress test reduces buying power by roughly 15–20% compared to qualifying at the contract rate alone.

The stress test does not apply to mortgage renewals with your existing lender (though it does apply if you switch lenders at renewal). Some credit unions are exempt from the federal stress test but may apply their own qualifying standards.

Rate Holds and Rate Guarantees

When you apply for a mortgage pre-approval, most lenders will hold your rate for 90 to 120 days. This means if rates rise between your pre-approval and closing, you keep the lower rate. If rates drop, you typically get the lower rate at closing. Rate holds are extremely valuable in volatile rate environments — always get one as early as possible.

Shopping for the Best Rate: Broker vs. Bank

Going directly to your bank is convenient but rarely yields the best rate. A mortgage broker works with 30–50 lenders simultaneously and is compensated by the lender (not you) when they place a mortgage. For most borrowers, using a broker results in a lower rate with no additional cost. The Canadian Mortgage Brokers Association (CMBA) and Mortgage Professionals Canada are good resources to find licensed brokers in your area.