Fixed Mortgage Rates

Traditionally, fixed mortgage rates have been the most popular option for Canadians. It offers a good combination of a low rate and security against rising interest rates. The face value of the rate, however, isn’t the only factor you should consider when deciding between rates. Pre-payment privileges, ability to port your mortgage to another property, length of the rate hold and the ability to conduct on-line views and changes are a few of the other factors that need to be considered. In all cases, Rate Showroom recommends you speak with an independent mortgage broker for a free consultation before you commit to any institution.

Updated: July 6th, 2016
Rate Showroom
Published Rate
Lender
Term
Rate Hold
Pre-payments
Double-up Option
Other Special Conditions
 
2.54%2.54%5 Years90 Days20/20NoYes. High Ratio OnlyRequest Rate
2.49%2.79%First National FInancial LP
First National
5 Years90 Days15/15YesYesRequest Rate
2.49%4.64%
Scotiabank
5 Years90Days15/15YesExcludes existing Scotia renewals and refinancesRequest Rate
2.54%2.79%
FirstNational
5 Years120 Days15/15YesNoRequest Rate
2.49%4.64%
TD Canada Trust
5 Years120 Days15/20NoExcludes existing TD renewalsRequest Rate
2.49%4.74%
BMO
5 Years60 Days10/10No"No Frills" Mortgage. Restrictions apply
Request Rate
2.84%4.74%
National Bank
5 Years90 Days10/20YesNoRequest Rate
3.64%3.14%Radius Financial5 Years45 Days10/10NoYesRequest Rate
3.79%3.79%
Tangerine
5 Years120 Days25/25NoMax 25 Yr AmortizationRequest Rate
4.64%4.64%
RBC Royal Bank
5 Years120 Days10/10YesNoRequest Rate
4.64%4.79%
CIBC
5 Years90 Days10/10NoNoRequest Rate

Rates are subject to change without notice. All rates are subject to borrower qualification.

5 Year Fixed Mortgage Rates

5 year fixed mortgage rates fluctuate cyclically with the economy typically peaking during the boom times and falling during recession.  Mirroring bond yields, the peaks are a result of large scale investors selling off bonds in favor of higher returns on equity investments.  The glut of bonds cause the price to drop and the inversely related yields go up.  Oppositely, when there’s an economic downturn, these same investors will seek the safety of bonds in droves.  The mass bond purchases drive up the price (the law of supply and demand).  Because of their inverse relationship, high bond prices drive down yields.  Bonds are used by the majority of mortgage companies to fund their mortgage business.  The mortgage companies will fund a large quantity of mortgages (typically $100 million blocks) and then sell off the asset as a bond (Mortgage Backed Bond or Mortgage Backed Security) to the market place.  The yield that they can get in the financial marketplace dictates the mortgage rates they can offer their customers.

Mortgage Rate Chart5 yr fixed mtg rate Chart

What’s more difficult to understand is the overlaying trend of mortgage rates over the past 60 years.  As can be seen from the graph, mortgage rates have climbed from 5% in 1951 to a peak of 18.21% in 1982 and then fallen back to 4.31% by the end of 2012.  So much has changed over the past 60 years that it would be impossible to lay the blame of the peak on any single factor.  Canada’s economy (and the world’s in general) operates much differently than it did even only 20 years ago.  While it’s clear that 5 year fixed mortgage rates will continue to move cyclically with the economy in the decade to come, there is no need to worry that mortgage rates will climb back above 10%.