Canada’s mortgage rate history spans more than 50 years of dramatic cycles — from the 18%+ crisis peaks of 1981 to the sub-2% pandemic lows of 2020–21, and back up through the fastest tightening in four decades in 2022–23. This page documents the complete history of Canadian mortgage rates from 1975 to 2026: 5-year fixed, 3-year fixed, 1-year fixed, variable, and the Bank of Canada overnight rate — all sourced from official Bank of Canada posted-rate data.
At today’s discounted rates of roughly 3.9–4.3% for a 5-year fixed, Canadian mortgage rates sit above the pandemic-era lows but comfortably below the long-term average of approximately 9.2% since 1975. For borrowers making term decisions, renewing mortgages, or simply trying to put today’s rates in context, that 50-year perspective matters. Use the charts and tables below to look up rates for any year, compare fixed vs. variable, and understand what drove each rate cycle. For live lender pricing today, see current Canada mortgage rates or the 2026 mortgage rate forecast.
Canada mortgage rate history: current rates (June 2026)
The Bank of Canada’s policy rate stands at 2.25% as of June 2026, holding steady after a cumulative 275 basis points of cuts from the peak of 5.00% in mid-2024. Based on Bank of Canada weekly posted-rate data, chartered bank rates currently stand at:
| Rate Type | Current Posted Rate | Typical Discounted Rate |
|---|---|---|
| 5-year fixed | 6.09% | 3.9%–4.3% |
| 3-year fixed | 6.05% | 3.6%–4.0% |
| 1-year fixed | 5.49% | 4.4%–4.9% |
| 10-year fixed | 6.79% | 5.0%–5.5% |
| Variable (est.) | ~4.15% (Prime -0.30%) | 3.3%–3.8% |
| Prime rate | 4.45% | — |
Posted rates are set by chartered banks and reported by the Bank of Canada. Discounted rates — what most borrowers actually pay — are typically 1.5–2.5% lower depending on the lender, property type, and borrower qualifications.
Source: Bank of Canada — Posted interest rates offered by chartered banks
Looking for live lender pricing by location? See Canada mortgage rates by province and city and the full mortgage rates guide.
Discounted 1-Year, 3-Year, 5-Year and 10-Year Fixed Mortgage Rates
Discounted rates shown above are estimated typical rates offered by lenders and brokers — approximately 1.5–2.5% below the posted bank rates shown in the tables below. For the full 50-year history starting from 1975, see the posted rate tables below.
Jump to: 5-Year Fixed History · Variable Rate History · Term Comparison (1, 3, 5-Year) · 10-Year Fixed · Key Historical Periods · Bank of Canada Rate
5-year fixed mortgage rate history
The 5-year fixed rate is the most popular mortgage term in Canada, chosen by roughly 50% of borrowers. Here is the complete history of the 5-year fixed posted rate since 1975:
| Year | 5-Year Fixed (Posted) | Change | Context |
|---|---|---|---|
| 1975 | 11.50% | — | Oil crisis aftermath |
| 1976 | 12.00% | +0.50% | Inflation rising |
| 1977 | 10.25% | -1.75% | Brief easing |
| 1978 | 10.25% | 0.00% | Stable |
| 1979 | 11.25% | +1.00% | Second oil shock begins |
| 1980 | 14.50% | +3.25% | BoC tightening aggressively |
| 1981 | 18.13% | +3.63% | All-time peak |
| 1982 | 19.25% | +1.12% | Recession but rates lag |
| 1983 | 13.50% | -5.75% | Recovery begins |
| 1984 | 13.50% | 0.00% | Stable |
| 1985 | 11.75% | -1.75% | Gradual decline |
| 1986 | 11.25% | -0.50% | |
| 1987 | 11.25% | 0.00% | |
| 1988 | 11.75% | +0.50% | Pre-recession tightening |
| 1989 | 12.00% | +0.25% | |
| 1990 | 13.25% | +1.25% | 1990–91 recession |
| 1991 | 11.25% | -2.00% | Recovery |
| 1992 | 9.63% | -1.62% | Rates under 10% |
| 1993 | 8.85% | -0.78% | |
| 1994 | 9.90% | +1.05% | Brief tightening |
| 1995 | 8.95% | -0.95% | |
| 1996 | 7.95% | -1.00% | |
| 1997 | 7.00% | -0.95% | |
| 1998 | 6.95% | -0.05% | Asian financial crisis |
| 1999 | 7.50% | +0.55% | |
| 2000 | 8.30% | +0.80% | Dot-com peak |
| 2001 | 7.50% | -0.80% | Post-9/11 easing |
| 2002 | 6.85% | -0.65% | |
| 2003 | 6.45% | -0.40% | |
| 2004 | 6.30% | -0.15% | |
| 2005 | 6.05% | -0.25% | |
| 2006 | 6.60% | +0.55% | |
| 2007 | 7.19% | +0.59% | Pre-GFC peak |
| 2008 | 7.15% | -0.04% | Global financial crisis |
| 2009 | 5.79% | -1.36% | Emergency easing |
| 2010 | 5.42% | -0.37% | |
| 2011 | 5.39% | -0.03% | |
| 2012 | 5.24% | -0.15% | |
| 2013 | 5.24% | 0.00% | |
| 2014 | 4.79% | -0.45% | Oil price collapse |
| 2015 | 4.64% | -0.15% | Historic low |
| 2016 | 4.64% | 0.00% | Historic low |
| 2017 | 4.64% | 0.00% | Historic low |
| 2018 | 5.34% | +0.70% | BoC tightening cycle |
| 2019 | 5.34% | 0.00% | |
| 2020 | 4.94% | -0.40% | COVID pandemic |
| 2021 | 4.79% | -0.15% | Near-record low |
| 2022 | 6.04% | +1.25% | Fastest hikes in 40 years |
| 2023 | 6.49% | +0.45% | Peak tightening |
| 2024 | 6.79% | +0.30% | Rate cuts begin Q3 |
| 2025 | 6.09% | -0.70% | Cumulative 200bp of cuts |
| 2026 | 6.09% | 0.00% | Holding steady |
The 5-year fixed posted rate has ranged from a low of 4.64% (2015–2017) to an all-time high of 19.25% (1982). The long-term average since 1975 is approximately 9.2%.
Two things stand out in this data. First, the dramatic speed of the 2022–23 rate surge: the posted 5-year fixed jumped from 4.79% to 6.79% in roughly 18 months — the fastest increase since the early 1980s. Second, the duration of today’s elevated posted rates: even after 275bp of BoC cuts, the 5-year fixed posted rate remains near its 2022 starting point, because fixed rates follow bond yields rather than the overnight rate directly (see how bond yields affect mortgage rates).
Borrowers who locked in 5-year fixed rates at 1.5–2.0% in 2020–21 and are now renewing face one of the largest payment shocks in Canadian mortgage history. A $500,000 mortgage at 1.79% carried payments of roughly $2,060/month; at 4.2% discounted, the same balance renews at approximately $2,710 — a $650/month increase on a single renewal. Use the mortgage renewal calculator to model your own renewal scenario.
5-Year Fixed Mortgage Rate History — Posted Rate (1975–2026)
Variable mortgage rate history
Variable (or adjustable) rates are tied to the prime rate, which follows the Bank of Canada’s overnight rate. They tend to be lower than fixed rates in most years, but carry the risk of payment increases during tightening cycles — as the 2022–23 cycle demonstrated dramatically.
| Year | Variable Rate | 5-Year Fixed | Lower Rate | Spread |
|---|---|---|---|---|
| 1975 | 8.70% | 11.50% | Variable | 2.80% |
| 1976 | 9.95% | 12.00% | Variable | 2.05% |
| 1977 | 7.95% | 10.25% | Variable | 2.30% |
| 1978 | 8.95% | 10.25% | Variable | 1.30% |
| 1979 | 11.70% | 11.25% | Fixed | 0.45% |
| 1980 | 13.45% | 14.50% | Variable | 1.05% |
| 1981 | 19.20% | 18.13% | Fixed | 1.07% |
| 1982 | 16.20% | 19.25% | Variable | 3.05% |
| 1983 | 10.70% | 13.50% | Variable | 2.80% |
| 1984 | 11.70% | 13.50% | Variable | 1.80% |
| 1985 | 10.20% | 11.75% | Variable | 1.55% |
| 1986 | 9.95% | 11.25% | Variable | 1.30% |
| 1987 | 9.20% | 11.25% | Variable | 2.05% |
| 1988 | 10.45% | 11.75% | Variable | 1.30% |
| 1989 | 13.20% | 12.00% | Fixed | 1.20% |
| 1990 | 13.95% | 13.25% | Fixed | 0.70% |
| 1991 | 9.45% | 11.25% | Variable | 1.80% |
| 1992 | 7.20% | 9.63% | Variable | 2.43% |
| 1993 | 5.70% | 8.85% | Variable | 3.15% |
| 1994 | 6.70% | 9.90% | Variable | 3.20% |
| 1995 | 7.95% | 8.95% | Variable | 1.00% |
| 1996 | 6.20% | 7.95% | Variable | 1.75% |
| 1997 | 4.45% | 7.00% | Variable | 2.55% |
| 1998 | 6.20% | 6.95% | Variable | 0.75% |
| 1999 | 5.95% | 7.50% | Variable | 1.55% |
| 2000 | 7.20% | 8.30% | Variable | 1.10% |
| 2001 | 5.95% | 7.50% | Variable | 1.55% |
| 2002 | 3.95% | 6.85% | Variable | 2.90% |
| 2003 | 4.45% | 6.45% | Variable | 2.00% |
| 2004 | 3.70% | 6.30% | Variable | 2.60% |
| 2005 | 3.95% | 6.05% | Variable | 2.10% |
| 2006 | 5.70% | 6.60% | Variable | 0.90% |
| 2007 | 5.70% | 7.19% | Variable | 1.49% |
| 2008 | 4.45% | 7.15% | Variable | 2.70% |
| 2009 | 1.95% | 5.79% | Variable | 3.84% |
| 2010 | 2.20% | 5.42% | Variable | 3.22% |
| 2011 | 2.70% | 5.39% | Variable | 2.69% |
| 2012 | 2.70% | 5.24% | Variable | 2.54% |
| 2013 | 2.70% | 5.24% | Variable | 2.54% |
| 2014 | 2.70% | 4.79% | Variable | 2.09% |
| 2015 | 2.55% | 4.64% | Variable | 2.09% |
| 2016 | 2.40% | 4.64% | Variable | 2.24% |
| 2017 | 2.40% | 4.64% | Variable | 2.24% |
| 2018 | 3.15% | 5.34% | Variable | 2.19% |
| 2019 | 3.65% | 5.34% | Variable | 1.69% |
| 2020 | 2.15% | 4.94% | Variable | 2.79% |
| 2021 | 2.15% | 4.79% | Variable | 2.64% |
| 2022 | 3.40% | 6.04% | Variable | 2.64% |
| 2023 | 6.65% | 6.49% | Fixed | 0.16% |
| 2024 | 6.65% | 6.79% | Variable | 0.14% |
| 2025 | 4.65% | 6.09% | Variable | 1.44% |
| 2026 | 4.15% | 6.09% | Variable | 1.94% |
5-Year Fixed vs. Variable Mortgage Rate (1975–2026)
Fixed vs. variable: which has been lower?
Over the 52-year period from 1975–2026, variable rates have been lower than 5-year fixed rates in 42 of 52 years — roughly 81% of the time. The exceptions were concentrated in two specific periods:
- 1979, 1981, 1989–1990: During aggressive BoC tightening when short-term rates spiked above long-term rates (inverted yield curve)
- 2023: The fastest tightening cycle in 40 years briefly pushed variable rates above fixed for the first time since 1990
The average spread between the 5-year fixed and variable rate has been approximately 1.8 percentage points in favour of variable. However, the 2022–23 tightening cycle demonstrated that during periods of rapid rate hikes, variable borrowers face significant payment shock — with some homeowners seeing monthly payments increase by $1,500–$2,000 on a $600,000 mortgage.
For current borrowers, the variable rate discount relative to 5-year fixed has re-emerged: variable rates are roughly 1.9pp below the 5-year fixed posted rate in 2026. However, the question is whether that spread is sufficient compensation for the risk of further rate volatility. See the fixed vs. variable mortgage guide for a decision framework based on your situation, term, and rate outlook.
Posted 1-year, 3-year, and 5-year rate history
For detailed comparison across all fixed terms, the following table shows the posted rates for 1-year, 3-year, and 5-year fixed mortgages at chartered banks since 1980:
| Year | 1-Year Fixed | 3-Year Fixed | 5-Year Fixed | Lowest Term |
|---|---|---|---|---|
| 1980 | 13.75% | 14.25% | 14.50% | 1-Year |
| 1981 | 18.00% | 18.13% | 18.13% | 1-Year |
| 1982 | 18.13% | 18.75% | 19.25% | 1-Year |
| 1983 | 11.00% | 12.75% | 13.50% | 1-Year |
| 1984 | 12.25% | 13.50% | 13.50% | 1-Year |
| 1985 | 10.00% | 11.25% | 11.75% | 1-Year |
| 1986 | 9.75% | 10.75% | 11.25% | 1-Year |
| 1987 | 9.75% | 10.75% | 11.25% | 1-Year |
| 1988 | 10.75% | 11.25% | 11.75% | 1-Year |
| 1989 | 12.75% | 12.25% | 12.00% | 5-Year |
| 1990 | 13.25% | 13.25% | 13.25% | Tie |
| 1991 | 10.00% | 11.00% | 11.25% | 1-Year |
| 1992 | 8.25% | 9.00% | 9.63% | 1-Year |
| 1993 | 6.88% | 8.25% | 8.85% | 1-Year |
| 1994 | 8.00% | 9.50% | 9.90% | 1-Year |
| 1995 | 8.13% | 8.63% | 8.95% | 1-Year |
| 1996 | 6.50% | 7.44% | 7.95% | 1-Year |
| 1997 | 5.55% | 6.50% | 7.00% | 1-Year |
| 1998 | 6.50% | 6.80% | 6.95% | 1-Year |
| 1999 | 6.72% | 7.30% | 7.50% | 1-Year |
| 2000 | 7.90% | 8.13% | 8.30% | 1-Year |
| 2001 | 6.70% | 7.13% | 7.50% | 1-Year |
| 2002 | 5.30% | 6.15% | 6.85% | 1-Year |
| 2003 | 4.75% | 5.90% | 6.45% | 1-Year |
| 2004 | 4.60% | 5.80% | 6.30% | 1-Year |
| 2005 | 4.90% | 5.60% | 6.05% | 1-Year |
| 2006 | 6.33% | 6.45% | 6.60% | 1-Year |
| 2007 | 7.05% | 7.30% | 7.19% | 5-Year |
| 2008 | 6.95% | 7.00% | 7.15% | 1-Year |
| 2009 | 3.80% | 4.45% | 5.79% | 1-Year |
| 2010 | 3.55% | 4.15% | 5.42% | 1-Year |
| 2011 | 3.50% | 4.35% | 5.39% | 1-Year |
| 2012 | 3.20% | 3.95% | 5.24% | 1-Year |
| 2013 | 3.14% | 3.73% | 5.24% | 1-Year |
| 2014 | 3.14% | 3.75% | 4.79% | 1-Year |
| 2015 | 2.89% | 3.39% | 4.64% | 1-Year |
| 2016 | 3.14% | 3.39% | 4.64% | 1-Year |
| 2017 | 3.14% | 3.39% | 4.64% | 1-Year |
| 2018 | 3.49% | 4.29% | 5.34% | 1-Year |
| 2019 | 3.64% | 4.29% | 5.34% | 1-Year |
| 2020 | 3.19% | 3.89% | 4.94% | 1-Year |
| 2021 | 2.79% | 3.49% | 4.79% | 1-Year |
| 2022 | 4.74% | 5.39% | 6.04% | 1-Year |
| 2023 | 7.14% | 6.54% | 6.49% | 5-Year |
| 2024 | 7.84% | 6.97% | 6.79% | 5-Year |
| 2025 | 6.09% | 6.05% | 6.09% | 3-Year |
| 2026 | 5.49% | 6.05% | 6.09% | 1-Year |
Posted Mortgage Rates by Term — 1-Year, 3-Year, 5-Year Fixed (1980–2026)
In a normal yield curve environment, shorter terms carry lower rates because lenders face less risk. The 1-year fixed has been the lowest of the three fixed terms in the vast majority of years. The notable exception was 2023–2024, when the inverted yield curve meant the 5-year fixed was actually cheaper than the 1-year — a rare situation caused by the market expecting future rate cuts. When the yield curve inverts like this, it is generally a signal to consider locking in a longer term at the lower rate. See how bond yields affect mortgage rates for a full explanation of why this happens.
10-year fixed mortgage rate overview
The 10-year fixed mortgage is the longest standard fixed term available from most Canadian lenders. It provides maximum payment stability but typically carries a 0.5–1.5% premium over the 5-year fixed rate. The 10-year term is not as widely tracked historically as the 1-, 3-, and 5-year terms, but it has gained popularity during periods of low rates when borrowers wanted to lock in for longer.
Here are estimated typical discounted 10-year fixed rates compared to 5-year fixed over the past 20 years:
| Year | 10-Year Fixed (Discounted) | 5-Year Fixed (Discounted) | 10-Year Premium |
|---|---|---|---|
| 2006 | 5.55% | 5.20% | +0.35% |
| 2008 | 5.95% | 5.40% | +0.55% |
| 2010 | 4.05% | 3.25% | +0.80% |
| 2012 | 3.65% | 2.84% | +0.81% |
| 2014 | 3.45% | 2.64% | +0.81% |
| 2016 | 3.25% | 2.20% | +1.05% |
| 2018 | 3.75% | 3.45% | +0.30% |
| 2020 | 2.75% | 1.79% | +0.96% |
| 2022 | 5.35% | 4.74% | +0.61% |
| 2023 | 5.85% | 5.29% | +0.56% |
| 2024 | 5.45% | 4.39% | +1.06% |
| 2025 | 4.85% | 3.94% | +0.91% |
| 2026 | 5.09% | 3.94% | +1.15% |
The 10-year premium widens during periods of rate uncertainty — when markets expect future volatility, lenders charge more for the extra years of certainty. This premium narrowed to just 0.30% in 2018 (a relatively stable rate environment) and widened to 1.15% in 2026 (reflecting uncertainty around trade tariffs and global inflation).
The 10-year term is most suitable for borrowers who plan to stay in their home for the full term and want to avoid the risk and cost of renewing into a potentially higher rate environment.
Note: 10-year fixed mortgage rates are not officially reported by the Bank of Canada in their posted rate tables. Rates shown are estimates based on market data and typical lender offerings.
Key periods in Canadian mortgage rate history
The 1981 crisis: mortgage rates hit 18%+
The early 1980s saw the most extreme mortgage rates in Canadian history. The Bank of Canada, under Governor Gerald Bouey, raised the bank rate aggressively to combat stagflation — the toxic combination of double-digit inflation (12.5% in 1981) and economic stagnation.
- 5-year fixed posted rate: 18.13% (September 1981)
- Variable rate: 19.20% (1981)
- 1-year fixed: 18.00% (1981)
For context, a $300,000 mortgage at 18% over 25 years would carry a monthly payment of roughly $4,500 — compared to about $1,850 at today’s 6% posted rate. The severe rates triggered a deep recession and a housing downturn, with prices falling 10–15% in many markets.
The long decline: 1982–2017
After peaking in 1981–1982, Canadian mortgage rates entered a 35-year secular decline. The 5-year fixed posted rate fell from 19.25% in 1982 to 4.64% in 2015 — a drop of nearly 15 percentage points across three and a half decades. This decline was driven by:
- Inflation targeting: The Bank of Canada adopted a 2% inflation target in 1991, anchoring expectations and reducing the need for high rates
- Globalization: Global capital flows and competition among financial institutions compressed lending spreads
- Demographics: An aging population and slower growth reduced natural interest rates worldwide
- Technology: Financial innovation improved efficiency and reduced intermediation costs
This structural decline created an unprecedented tailwind for Canadian real estate, as falling rates steadily increased purchasing power. A borrower in 1982 could afford roughly 40% less home than the same borrower in 2017 at the same income, purely due to the rate differential.
The COVID-19 emergency: 2020–2021
The Bank of Canada slashed its overnight rate to 0.25% in March 2020 — the effective lower bound — in response to the pandemic. This pushed variable mortgage rates to historic lows:
- Variable rate: 2.15% (posted, 2020–2021)
- 5-year fixed posted: 4.79% (2021)
- Actual discounted 5-year fixed rates fell as low as 1.5–2.0% — levels never seen before
Combined with pandemic-era fiscal stimulus and remote work demand, rock-bottom rates fuelled a massive housing boom. Canadian home prices surged approximately 50% between early 2020 and February 2022.
The 2022–2023 tightening: fastest hikes in 40 years
Starting in March 2022, the Bank of Canada raised its overnight rate from 0.25% to 5.00% in just 16 months — the fastest tightening cycle since the Volcker era. The impact on mortgage rates was dramatic:
- Variable rates surged from 2.15% to 6.65%
- 5-year fixed posted rate rose from 4.79% to 6.79%
- For the first time since 1990, variable rates exceeded fixed rates (2023)
- Monthly payments on a typical $500,000 variable mortgage increased by roughly $1,600/month
The rapid hikes caused significant financial stress for variable-rate borrowers and contributed to a housing market correction, with average prices falling approximately 20% from peak levels before stabilizing.
The 2024–2025 easing cycle
The Bank of Canada began cutting rates in June 2024, reducing the overnight rate from 5.00% to 2.25% by January 2026 through seven consecutive cuts totalling 275 basis points. This was one of the most aggressive easing cycles on record.
- Variable rates dropped from 6.65% to 4.15%
- The prime rate fell from 7.20% to 4.45%
- Fixed rates were slower to follow, as bond yields remained elevated due to global inflation concerns and fiscal uncertainty
As of March 2026, the Bank of Canada paused its cutting cycle at 2.25%, with markets pricing in the possibility of further cuts depending on trade conditions and economic data. The next announcement is scheduled for March 18, 2026.
Bank of Canada overnight rate history
The Bank of Canada’s policy rate is the anchor for all Canadian interest rates — when it moves, the prime rate follows within days, and variable mortgage rates adjust immediately. Fixed rates respond more slowly, moving with Government of Canada bond yields which price in expected future rate changes rather than just the current overnight rate. Here is the complete schedule of rate decisions from the 2022–2026 tightening-and-easing cycle:
| Date | Policy Rate | Change |
|---|---|---|
| Mar 2, 2022 | 0.50% | +0.25% |
| Apr 13, 2022 | 1.00% | +0.50% |
| Jun 1, 2022 | 1.50% | +0.50% |
| Jul 13, 2022 | 2.50% | +1.00% |
| Sep 7, 2022 | 3.25% | +0.75% |
| Oct 26, 2022 | 3.75% | +0.50% |
| Dec 7, 2022 | 4.25% | +0.50% |
| Jan 25, 2023 | 4.50% | +0.25% |
| Jun 7, 2023 | 4.75% | +0.25% |
| Jul 12, 2023 | 5.00% | +0.25% |
| Jun 5, 2024 | 4.75% | -0.25% |
| Jul 24, 2024 | 4.50% | -0.25% |
| Sep 4, 2024 | 4.25% | -0.25% |
| Oct 23, 2024 | 3.75% | -0.50% |
| Dec 11, 2024 | 3.25% | -0.50% |
| Jan 29, 2025 | 3.00% | -0.25% |
| Mar 12, 2025 | 2.75% | -0.25% |
| Sep 17, 2025 | 2.50% | -0.25% |
| Oct 29, 2025 | 2.25% | -0.25% |
| Jan 28, 2026 | 2.25% | 0.00% |
Bank of Canada Policy Rate — 2022–2026 Rate Cycle
The 2022–23 hike cycle was unprecedented in its speed: 10 consecutive increases totalling 475 basis points in just 16 months. The easing cycle that followed (June 2024 – January 2026) cut 275 basis points but left the policy rate at 2.25% — well above the 0.25% emergency floor of 2020. For a detailed explanation of how each Bank of Canada rate decision flows through to the mortgage rates you see at lenders, see how Bank of Canada rate decisions impact mortgages.
How mortgage rates are set in Canada
Understanding how mortgage rates are determined helps contextualize the historical data:
Fixed mortgage rates
Fixed mortgage rates are primarily driven by Government of Canada bond yields — specifically, the 5-year government bond yield for 5-year fixed mortgages. When bond yields rise (because investors expect higher inflation or economic growth), fixed mortgage rates follow. The typical markup over the 5-year bond yield is about 1.5–2.0 percentage points.
This is why fixed rates sometimes move independently of the Bank of Canada’s policy rate — they respond to bond market expectations about the future, not just current short-term rates.
Variable mortgage rates
Variable mortgage rates are directly tied to the prime rate, which moves in lockstep with the Bank of Canada’s overnight rate. When the BoC cuts or raises rates, prime adjusts by the same amount, and variable mortgage rates follow. The typical variable mortgage rate is quoted as “prime minus X%” where X is the discount offered by the lender.
Why posted vs. discounted rates matter
The rates in the tables above are posted rates — the standard rates advertised by chartered banks. In practice, almost no borrower pays the posted rate. Discounted rates offered by mortgage brokers and lenders are typically 1.5–2.5% lower. The posted rate is still important because:
- It’s used to stress test mortgage applicants (the qualifying rate is the higher of the posted 5-year rate or the contract rate + 2%)
- It’s the only rate with consistent historical data going back to the 1970s
- Mortgage penalties for breaking a fixed-rate mortgage are often calculated using posted rates
Mortgage rate outlook: 2026 and beyond
As of June 2026, the Bank of Canada has held its policy rate at 2.25% since January 2026. Consensus expectations for the remainder of 2026 reflect ongoing uncertainty from trade conditions and global inflation:
| Forecast | Range |
|---|---|
| BoC overnight rate (end of 2026) | 2.00%–2.50% |
| 5-year fixed discounted (end of 2026) | 3.5%–4.5% |
| Variable discounted (end of 2026) | 3.0%–3.5% |
Key factors to watch:
- Trade tariffs: Ongoing Canada–US trade tensions continue to create uncertainty about economic growth and inflation, constraining the Bank of Canada’s ability to cut further
- Inflation trajectory: Core inflation has largely returned to the 2% target, which would support eventual rate cuts if growth slows
- Housing market: Any significant rebound in housing demand could push bond yields — and therefore fixed mortgage rates — higher before the BoC policy rate moves
- US Federal Reserve: The Fed’s rate path directly influences Canadian bond yields and limits how far the BoC can diverge from US rates
- Employment data: A weakening labour market would strengthen the case for further BoC cuts; resilient hiring keeps them on hold
For the most current analysis, see the mortgage rate forecast for 2026 and the interest rate forecast Canada pages, updated regularly.
Glossary
- Posted rate: The standard mortgage rate published by chartered banks, used for stress test qualification
- Discounted rate: The actual rate most borrowers pay, typically 1.5–2.5% below posted
- Prime rate: The rate set by commercial banks, currently 4.45%, typically about 2.2% above the BoC overnight rate
- Overnight rate: The Bank of Canada’s policy interest rate — the rate banks charge each other for overnight loans
- Basis point (bp): One hundredth of a percentage point (0.01%). A 25bp cut means a reduction of 0.25%
- Yield curve: The relationship between short-term and long-term interest rates. A “normal” curve has higher long-term rates; an “inverted” curve (higher short-term) signals expected rate cuts
- Stress test: The requirement that mortgage borrowers qualify at the higher of the posted 5-year rate or their contract rate plus 2%
- Variable rate mortgage: Rate fluctuates with prime rate; payments may be fixed (adjustable payment) or change (variable payment)
- Fixed rate mortgage: Rate locked in for the term; payments remain the same regardless of market rate changes
Related calculators
- Mortgage Calculator — calculate monthly payments at any interest rate
- Mortgage Affordability Calculator — see how much you can afford at current rates
- Mortgage Stress Test Calculator — check if you qualify under the stress test
- Mortgage Refinance Calculator — see if refinancing at today’s rates saves you money
- Mortgage Renewal Calculator — compare renewal options at current rates
- Fixed vs Variable Mortgage — detailed comparison of fixed and variable rate mortgages
Data sources
- Bank of Canada — Posted Rates Offered by Chartered Banks — official source for historical posted mortgage rates (1-year, 3-year, 5-year fixed, prime)
- Bank of Canada — Policy Interest Rate — overnight rate decision history
- Statistics Canada, Table 10-10-0145-01 — chartered bank interest rates
- Canada Mortgage and Housing Corporation — mortgage market analysis and reports