Buying a home is one of the biggest financial decisions in life. In Canada, most people use a mortgage to buy a house. A mortgage is a loan you get from a bank or lender to help you pay for your home. Every mortgage has an interest rate, which is the cost you pay for borrowing the money.
Right now in 2025, mortgage rates in Canada are changing. Many people want to know: What are the best mortgage rates in Canada? Let’s find out in simple, easy English!
Contents
- 1 What is a Mortgage Rate?
- 2 What Affects Mortgage Rates in Canada?
- 3 Mortgage Rates in Canada – April 2025
- 4 Best Mortgage Rates from Major Banks
- 5 Should You Choose Fixed or Variable Rate?
- 6 Top Mortgage Lenders Besides Big Banks
- 7 Tips to Get the Best Mortgage Rate
- 8 What Will Happen to Rates in 2025 and 2026?
- 9 A Real-Life Example
- 10 Quick Mortgage Information Table
What is a Mortgage Rate?
Before we talk about today’s rates, let’s understand what a mortgage rate is.
A mortgage rate is the percentage you pay to the bank in addition to the amount you borrowed. If the mortgage rate is lower, your monthly payments are also lower. If the mortgage rate is higher, you pay more each month.
There are two main types of mortgage rates:
- Fixed Rates: The interest rate stays the same for the entire term (like 5 years).
- Variable Rates: The interest rate can change during the term, depending on the prime rate set by banks.
What Affects Mortgage Rates in Canada?
Mortgage rates are influenced by many factors, such as:
- The Bank of Canada’s Policy Rate: When the Bank of Canada raises or lowers its rate, mortgage rates usually follow.
- Inflation: High inflation often causes mortgage rates to go up.
- Economic Conditions: If the economy is strong, rates may rise. If it is weak, rates might fall.
- Bond Yields: Especially for fixed rates, the yields of government bonds affect the mortgage rates.
Mortgage Rates in Canada – April 2025
In early 2025, the mortgage situation in Canada looks better than in previous years. After a few tough years of high rates, things are finally getting easier for homebuyers.
The Bank of Canada’s policy rate is now around 2.75%, much lower than it was in 2023 and early 2024. Because of this, banks and lenders have also lowered their mortgage rates.
Average Mortgage Rates Today:
- 5-Year Fixed Rate: About 4.29% to 4.59%
- 5-Year Variable Rate: About 4.50% to 4.75%
These are just average numbers. Some lenders may offer even better deals!
Best Mortgage Rates from Major Banks
Here is a simple table showing some of the best mortgage rates from Canada’s big banks:
| Bank | 5-Year Fixed Rate | 5-Year Variable Rate |
|---|---|---|
| RBC [check update rate] | 4.29% | 4.55% (Prime – 0.40%) |
| TD Bank [check update rate] | 4.39% | 4.89% (Prime – 0.21%) |
| CIBC [check update rate] | 4.45% | 4.75% (Prime – 0.20%) |
| BMO [check update rate] | 4.35% | 4.70% (Prime – 0.25%) |
| Scotiabank [check update rate] | 4.44% | 4.80% (Prime – 0.15%) |
Note: These rates can change daily! Always check with the bank directly.
Should You Choose Fixed or Variable Rate?
Many Canadians ask: Should I pick a fixed or variable mortgage?
- Fixed Rate:
- Good if you want stability.
- You will always know your monthly payment.
- Best when rates are expected to rise.
- Variable Rate:
- Your payments may go up or down.
- Sometimes cheaper than fixed rates.
- Best when rates are expected to fall.
In 2025, experts say rates might fall a little more. So, some people are choosing variable rates now. But if you want peace of mind, fixed might still be safer.
Top Mortgage Lenders Besides Big Banks
Apart from the big banks, other lenders in Canada offer amazing mortgage rates too:
- Mortgage Brokers: Brokers search for the best rates for you. Sometimes they find better deals than banks.
- Credit Unions: Smaller financial institutions like Meridian, Coast Capital, and DUCA often offer lower rates.
- Online Lenders: Companies like Nesto, Ratehub, and QuestMortgage give low rates with online applications.
Using a broker or online lender can sometimes save you 0.10% to 0.30% on your mortgage rate, which means thousands of dollars over time!
Tips to Get the Best Mortgage Rate
Here are easy tips to help you get the best rate possible:
1. Check Your Credit Score
The higher your credit score, the better your mortgage rate. Try to keep your score above 680.
2. Save for a Bigger Down Payment
If you can put 20% down, you may avoid mortgage insurance and get better rates.
3. Shop Around
Don’t just take the first offer. Compare rates from different banks, brokers, and credit unions.
4. Get Pre-Approved
A pre-approval letter shows that you are serious and can sometimes lock in a good rate for up to 120 days.
5. Think About Mortgage Terms
Sometimes, a 3-year fixed mortgage can offer a lower rate than a 5-year. Explore different terms.
What Will Happen to Rates in 2025 and 2026?
Most experts believe that rates might slowly decrease in 2025 and 2026.
- Inflation is cooling down.
- The economy is growing slowly.
- The Bank of Canada may cut rates a little more.
If you are planning to buy a home in 2025, it might be a good time because rates are better than the past few years. However, don’t wait too long — prices of homes could rise if many people start buying again!
A Real-Life Example
Let’s look at a real-life example:
Sarah and David want to buy a home for $600,000 in Toronto. They have saved a $120,000 down payment (20%). They need a mortgage of $480,000.
If they get a 5-year fixed mortgage at 4.29%, their monthly mortgage payment (principal and interest) would be about $2,630.
If they chose a 5-year variable mortgage at 4.55%, their first payment would be about $2,710 — but it could go up or down over time.
By choosing the right mortgage, Sarah and David can save a lot of money over the years!
Quick Mortgage Information Table
| Topic | Details |
|---|---|
| Average 5-Year Fixed Rate | 4.29% to 4.59% |
| Average 5-Year Variable Rate | 4.50% to 4.75% |
| Bank of Canada Rate | 2.75% |
| Best Bank Rate | RBC 5-Year Fixed at 4.29% |
| Better Deals | Mortgage Brokers, Credit Unions |
| Prediction | Rates may fall slowly in 2025-2026 |
Final Thoughts
Today’s mortgage rates in Canada are much better than they were in 2023 and 2024. Whether you are buying your first home, renewing your mortgage, or refinancing, it is important to shop around and make smart choices.
Remember:
- Compare different lenders.
- Think about your future plans (fixed vs variable).
- Improve your credit and save a good down payment.
- Get advice from a mortgage broker if needed.
The right mortgage can save you thousands of dollars over the years. Take your time, do your homework, and choose wisely.
Happy house hunting in 2025!