Canada Mortgage Rates Broker and How to Compare

Canada has a diverse mortgage market, with various lenders offering different rates and terms. This can make it challenging to compare and find the best mortgage rate.

In Canada, mortgage rates are influenced by the Bank of Canada's interest rate decisions, which can impact the entire market. A 0.25% increase in the Bank of Canada's interest rate can lead to a 0.25% increase in mortgage rates across the board.

To compare mortgage rates, it's essential to understand the different types of rates available, such as fixed-rate and variable-rate mortgages. Fixed-rate mortgages offer a guaranteed interest rate for a set period, while variable-rate mortgages are tied to the prime lending rate.

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Mortgage rates can be a bit overwhelming, but let's break it down. Today's 30-year fixed mortgage rates are available, and you can learn how they're calculated by checking out the details.

These rates and APRs are current as of a specific date and may change at any time. They assume you have a FICO score of 740+ and a specific down payment amount. They also assume the loan is for a single-family home as your primary residence.

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You can choose from various types of mortgage rates, including conventional fixed-rate, adjustable-rate, FHA, VA, and jumbo. Each type has its own set of rules and benefits.

Variable mortgage rates differ from fixed rates in that they can change over the term of your mortgage. Fixed rates, on the other hand, stay the same over the course of your mortgage term, usually 5 years.

Some provinces have their own mortgage rates, such as Manitoba, Newfoundland, and New Brunswick. If you're interested in learning more about these rates, you can check out the details.

The average APR for the benchmark 30-year fixed mortgage has fallen to 7.34%. This is a great time to consider fixed-rate mortgages, especially with rates this low.

Here's a breakdown of today's mortgage interest rates by term:

Interest rates can be complex, but understanding the basics can save you money in the long run. The interest rate is the cost of borrowing money, while the APR (Annual Percentage Rate) is the total cost of your loan, including lender fees and other expenses.

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Comparing loan details from multiple lenders is crucial to find the best deal for your situation. Don't just look at the interest rate, but also consider the APR, fees, and closing costs.

The type of mortgage you choose can also impact your interest rate. Fixed rates don't change over the term of your loan, while variable rates can change alongside changes in your lender's prime rate.

Lenders set the interest rates for their own loan products based on influence from the Federal Reserve, the economy, and consumer demand.

The Federal Reserve's decisions to raise or lower short-term rates can trigger lenders to adjust their mortgage rates as well.

Individual circumstances like credit score, down payment, and income can also affect mortgage rates.

Lenders consider the level of risk associated with a borrower when determining mortgage rates. If a borrower has a good credit score and a larger down payment, they may qualify for a lower interest rate.

The type of mortgage, such as a refinance or purchase, can also impact the interest rate a borrower qualifies for.

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Fixed rates will stay the same over the course of your mortgage term, usually 5 years, while variable rates will change alongside changes in your lender's prime rate.

Most home buyers opt for a fixed-rate loan, because the payments will be predictable and there's no risk of the rate rising.

Variable mortgage rates are typically lower than fixed rates but can vary over the duration of your term. They can be viewed as more risky when compared to fixed rates.

Historically, over 90% of Canadians who have maintained a variable mortgage rate throughout their entire mortgage term have paid less in interest than those who have stuck to a fixed rate.

Breaking a variable rate mortgage is substantially less expensive than breaking a fixed rate mortgage.

You can convert a variable rate to a fixed rate at any time without a penalty as long as you stay with your original mortgage lender.

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Variable rates have actually been higher than fixed rates since the end of 2022, but they still have some key advantages.

Here are some key differences between fixed and variable mortgage rates:

In the end, the choice between fixed and variable rates depends on your individual financial situation and goals.

Canada has a diverse mortgage market, with rates varying across provinces. As of January 16, 2025, the best high-ratio, 5-year fixed mortgage rate in Canada is 4.04%, available across much of the country, including Ontario, Quebec, British Columbia, and Alberta.

To qualify for a mortgage in Canada, you'll need a good credit score of at least 680 for the best rates, but a minimum of 560 to qualify at all. A credit score of less than 660 is generally considered bad credit, making it harder to qualify for the best rates.

In Canada, you'll also need to provide proof of income in the form of pay stubs and/or tax documents like your Notice of Assessment (NOA).

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The best high-ratio, 5-year fixed mortgage rate in Canada right now is 4.04%, available across much of the country, including Ontario, Quebec, British Columbia and Alberta.

This rate is significantly lower than the average 5-year fixed mortgage rate offered by the Big 5 Banks, which is currently 4.7%.

As of January 16, 2025, the best high-ratio, 5-year variable mortgage rate in Canada is 4.45%, available across Canada.

The Big 5 Banks' mortgage rates currently range from 4.59% to 4.89%, making it essential to compare rates to find the best deal.

If you're looking for the lowest mortgage rates in Canada, use our rate table to compare the offers from Canada's Big Banks and top mortgage lenders.

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Inflation in Canada is a complex issue that affects the economy and everyday life. The Bank of Canada plays a crucial role in managing inflation by adjusting its target for the overnight lending rate.

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The Bank of Canada increases the overnight lending rate to combat rising inflation, making borrowing more expensive and encouraging savings and reduced spending. This helps lower inflation and stabilize the economy.

Variable mortgage rates in Canada are directly tied to the prime lending rate, which is set by the banks. As the Bank of Canada raises its benchmark rate, banks increase their prime lending rates, causing variable mortgage rates to rise.

Fixed mortgage rates, however, are related to bond yields. As bond yields increase, lenders raise their fixed mortgage rates, making it more expensive to borrow money.

The Bank of Canada's rate cut in December 2024 was a significant move to support the economy. By cutting the benchmark rate by 0.50%, the Bank aims to stimulate economic growth and keep inflation at its 2% target.

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If you plan to rent out your property in Canada, your mortgage rate will be higher than if you live in it as your primary residence.

In Canada, insurable mortgages have a maximum amortization period of 25 years, unless you make a down payment of at least 20%, in which case you can access a mortgage with a longer amortization period, such as 30 years.

Mortgage default insurance, also known as CMHC insurance, is required if you're purchasing a home and your down payment is less than 20% of the purchase price and the value of the home is less than $1 million.

Refinancing your mortgage can result in higher rates, but if you have good credit and more than 20% equity in your home, you can also explore a home equity line of credit (HELOC).

A longer amortization period can result in a lower monthly payment, but you'll pay more in interest overall.

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To qualify for a mortgage in Canada, you'll need a good credit score. A credit score of 680 or higher will give you the best mortgage rates, but a score of at least 560 is required to qualify for a mortgage at all.

Your credit report will also be scrutinized for any derogatory information, such as missed payments that have gone to collections. If you have bad credit, you may need to use a sub-prime mortgage lender, which will charge higher rates.

To prove your income, you'll need to provide pay stubs and/or tax documents like your Notice of Assessment (NOA). This is especially important if you've recently started a new job, as lenders may want to see that you've held the position for at least a year.

A mortgage stress test is also required to qualify for a mortgage in Canada. This test ensures you can still make your mortgage payments if interest rates rise over the course of your term. The benchmark rate for the stress test is 5.25%, or your contract rate plus 2%, whichever is higher.

There are two exceptions to the mortgage stress test: borrowers who are renewing their mortgage term at their original lender, and borrowers with high-ratio, insured mortgages switching to another lender at renewal, as long as the original terms of their loan and amortization don't change.

Here are the minimum credit scores required to qualify for a mortgage in Canada:

Keep in mind that these are general guidelines, and your individual circumstances may vary. It's always a good idea to consult with a mortgage professional to determine the best course of action for your specific situation.

In Canada, the mortgage stress test is a crucial factor in determining your qualification for a mortgage. The stress test ensures you can afford your mortgage payments even if interest rates rise.

The benchmark rate for the stress test is 5.25%, or your contract rate plus 2%, whichever is higher. For example, if your lender offers a mortgage rate of 5%, you'll need to prove you can afford payments at 7%.

All mortgage borrowers must pass the stress test, with two exceptions: those renewing their mortgage term at their original lender, and those with high-ratio, insured mortgages switching to another lender at renewal.

The Office of the Superintendent of Financial Institutions (OSFI) governs the standards for the mortgage stress test, while the federal Department of Finance oversees high-ratio and insured mortgages.

Here's a breakdown of the stress test exceptions:

The stress test is designed to protect you from taking on too much debt, but it can also limit your borrowing power. It's essential to understand the stress test requirements and how they may impact your qualification for a mortgage.

Independent mortgage brokers are licensed mortgage specialists who have access to multiple lenders and mortgage rates, allowing them to negotiate the lowest rate for you.

Applying for a mortgage through a broker is a straightforward process, and most lenders offer online applications, so you don't have to drive to a physical location. Applying for multiple mortgages in a short period of time won't affect your credit score as each application is counted as one query within a 45-day window.

Using a broker allows you to shop around quickly and easily, at no cost to you, and they can pass volume discounts directly to you. This can be a significant advantage over getting a mortgage directly from a lender.

When working with a broker, one of the most important decisions you'll make is how long to lock in your mortgage rate. Typically, you can lock in a mortgage rate for 30 to 60 days. If the rate lock expires, you're no longer guaranteed the locked-in rate unless the lender agrees to extend it.

A 30 to 60 day lock period is standard, but some lenders may offer longer periods, up to 90 or 120 days, for an additional fee. If you're unsure about the lock period, be sure to ask your broker for clarification.

The length of the lock period will depend on your lender and the specifics of your loan. Some lenders may require a shorter lock period, while others may offer longer periods. It's essential to understand the terms of your rate lock before committing to it.

Here's a breakdown of the typical lock periods:

Keep in mind that the lock period may vary depending on your lender and the specifics of your loan. Be sure to review the terms of your rate lock carefully before committing to it.

Working with a broker can be a great way to get the best mortgage rate. Independent mortgage brokers are licensed mortgage specialists who have access to multiple lenders and mortgage rates.

They can negotiate the lowest rate for you and pass on volume discounts. This is because they acquire high quantities of mortgage products, allowing them to negotiate better rates.

Using a broker allows you to shop around quickly and easily, at no cost to you. This is a big advantage over going directly to your current bank, where you may be limited to their own mortgage products.

Applying for a mortgage through a broker is also straightforward, and most lenders offer online applications. This means you don't have to drive to a physical location, making it more convenient.

Here are some benefits of working with a broker:

Note: Applying for multiple mortgages in a short period of time won't affect your credit score, as each application is counted as one query within a 45-day window.

Shopping around for mortgage rates is a must to get the best deal. Comparing loan details from multiple lenders will help you determine the best offer for your situation.

A good interest rate on a mortgage is just one factor to consider. You should also look at the annual percentage rate (APR) and fees associated with the loan.

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Conventional fixed-rate loans are a popular choice for homebuyers. The term of a conventional fixed-rate loan is the amount of time you have to pay back the loan, which can range from 5 to 30 years.

The interest rate on a conventional fixed-rate loan is the amount your lender charges you for using their money, shown as a percentage of your principal loan amount. This rate will remain the same throughout the life of the loan.

The annual percentage rate (APR) represents the true yearly cost of your loan, including any fees or costs in addition to the actual interest you pay to the lender. This can be higher than the interest rate due to fees and other costs.

A mortgage point, or discount point, is a form of prepaid interest you can choose to pay up front in exchange for a lower interest rate and monthly payment. One mortgage point is equal to about 1% of your total loan amount.

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Here are some key benefits of conventional fixed-rate loans:

Keep in mind that the rates and monthly payments shown are based on a loan amount of $464,000 and a down payment of at least 25%. It's essential to understand how these rates, APRs, and monthly payments are calculated to make an informed decision.

Refinancing can be a great way to save money on your mortgage, and it's worth considering if you're not happy with your current interest rate. You can use a refinance calculator to determine if refinancing is right for you.

There are several reasons to refinance your mortgage, including taking advantage of lower interest rates or consolidating debt. You can use a debt consolidation calculator to see how refinancing can help you pay off other debts.

To determine if refinancing is a good idea, you should also consider any potential penalties for early repayment. You can use a penalty calculator to estimate these costs.

Before refinancing, it's a good idea to understand the process and what to expect. You can use a mortgage renewal process guide to walk you through the steps.

Here are some common reasons to refinance:

Shopping for a mortgage requires considering more than just the interest rate. You'll want to compare annual percentage rates (APRs) to ensure you're getting the best deal.

APRs take into account not only the interest rate, but also fees and closing costs. This means a lower APR can save you money in the long run.

Comparing loan details from multiple lenders is key to finding the best mortgage for your situation. This will help you determine which lender is offering the most competitive terms.

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Your credit score plays a significant role in determining the interest rate you'll qualify for on a mortgage. A higher credit score can qualify you for lower mortgage rates.

Most lenders offer several mortgage rates, depending on your credit score. Typically, a credit score of around 740 qualifies for the lowest rate. If your score isn't quite that high, you can still qualify for a good rate.

Getting your credit score won't cost you anything, and the site showing it to you might offer suggestions to help improve it. Paying off a collection account or lowering your credit card utilization ratio are two ways to boost your credit score.

Asking the lender if changing your loan amount could help you get a lower interest rate is also worth exploring.

Calculating your mortgage payment is a crucial step in setting a home buying budget. Your monthly payment will include principal, interest, taxes, homeowners insurance, and mortgage insurance.

To get an idea of what your monthly payment might be, you can use a mortgage calculator. This tool will give you an estimate of your monthly payment based on the loan balance, interest rate, and loan term.

For example, if you're borrowing $425,000 on a 30-year fixed-rate mortgage, here's what your monthly payment might look like at different interest rates:

As you can see, even a small increase in interest rate can result in a significant increase in your monthly payment. This is why it's essential to shop around for the best interest rate possible.

Your monthly payment will also depend on the loan term, with longer loan terms typically resulting in lower monthly payments. However, this also means you'll be paying more in interest over the life of the loan.

You can shop around for a mortgage without harming your credit score.

If you find a loan within 30 days, rate shopping won't affect your FICO Score at all.

All mortgage lender inquiries within a certain time period are counted as a single inquiry, whether you apply with one or 999 lenders.

The time period varies from 14 to 45 days.

To protect your credit, make all your applications within a two-week window.

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If you're considering locking your car, consider this: you may want to lock your car if you live in an area with high crime rates or if you're parking in a public lot.

A locked car will ensure your belongings are safe from theft or vandalism. If you're planning a long trip, locking your car can also give you peace of mind knowing your vehicle and its contents are secure.

You may want to lock your car if you're parking in a public lot or on the street, as this can reduce the risk of theft or damage. If you're going to be away from your car for an extended period, locking it is a good idea.

Here are some scenarios where locking your car might be a good idea:

High mortgage rates can be a bit of a shock. Mortgage rates are so high due to supply chain shortages and a resilient economy, which led to inflation and a surge in mortgage rates.

Inflation is a major driver of higher mortgage rates. The U.S. Federal Reserve raises its interest rate target when inflation increases, and interest rates throughout the financial sector follow suit.

The Fed raised its policy rate 11 times from March 2022 to July 2023, leading to a significant increase in mortgage rates. This is why you may have seen higher mortgage rates over the past year.

The good news is that the Federal Reserve has started to cut interest rates. On September 18, the Fed cut the benchmark rate by 50 basis points for the first time in four years.

Here are the current mortgage interest rates by term:

Choosing the right loan term for your mortgage can make a big difference in how much you pay over the life of the loan. Shorter loan terms, like 10-year or 15-year mortgages, typically come with lower interest rates compared to longer terms.

For example, if you have a $300,000 mortgage with a 6.75% interest rate, switching from a 30-year to a 15-year term can save you thousands of dollars in interest payments. Your monthly payment will increase, but you'll pay off the loan much faster.

You can use a mortgage calculator to see how different loan terms affect your payments and total interest paid. Plug in your numbers and compare the results.

Here's a comparison of two different loan terms:

As you can see, shortening the loan term from 30 years to 15 years can save you over $238,000 in interest payments.