Best Mortgage Rates In Canada For February 2025

We reviewed 100 mortgage lenders that do business both online and in-person throughout Canada. The lenders we reviewed represent some of the largest mortgage lenders by volume in Canada, which includes banks, credit unions and online lenders. Lenders that didn’t provide their mortgage rates or didn’t operate in four or more provinces or territories across Canada were not eligible for review.

Our conventional rates (rates that are uninsured) were generated through publicly available posted rates on the lender’s website, but also through the following borrower profiles that we presented to the lender anonymously by phone or online:

Profile 1

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $790,000
• Down Payment: 20% ($158,000)
• Credit Score: 700-719
• Postal Code: N2L 1V6 (Waterloo, Ontario)

Profile 2

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $1,300,000
• Down Payment: 20% ($260,000)
• Credit Score: 700-719
• Postal Code: V6A 2W5 (Vancouver, British Columbia)

Profile 3

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $300,000 ($60,000)
• Down Payment: 20%
• Credit Score: 700-719
• Postal Code: S4P 3C8 (Regina, Saskatchewan)

Profile 4

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $440,000 ($88,000)
• Down Payment: 20%
• Credit Score: 700-719
• Postal Code: B3S 0J1 (Halifax, Nova Scotia)

Our scores out of five are scored based on the following factors:

• Rate – 75%
• Timeliness – 5%
• Prepayment privileges – 5%
• Penalty calculation type – 10%
• Availability of discounted rates – 5%

Though these rates are accurate at the time of publication, they are intended only to provide a ballpark figure and sample of the rates a lender may offer in that province for that particular mortgage term. That does not mean that you will qualify for the above rates or that the lender in question hasn’t changed those rates since publication. Please consult a mortgage lender or broker to get the best rate possible for your particular property-buying circumstance and financial situation.

Fixed-rate mortgage rates are priced off of Government of Canada 5-year bond yields that fluctuate daily. Five-year fixed mortgage rates are typically 1.5% above the 5-year yield, though this spread can vary between 1% and 2%. This means if bond yields go up, fixed-rate mortgage rates also go up. Periods of high inflation (which occur when the CPI is above the Bank of Canada’s 2% target) cause bond yields to rise; conversely, when inflationary pressures cool, bond yields also come down. For example, in 1981 when the CPI averaged 12.5%, Canada experienced the highest inflation in 33 years. In September 1981, bond yields hit 18.78% and the 5-year fixed mortgage rate hit 21.75%.

As of February 10, 2025, the 5-year benchmark bond yield is 2.705%, down 100.39 basis points (or 1.0039%) from one year ago and down 25.95 basis points this year.

Variable-rate mortgages are affected by the Bank of Canada’s (BoC) monetary policy, namely interest rate hikes and cuts that occur eight times a year. The prime rate, or the rate the banks use to set the interest rates on their variable-rate products, is currently 5.20%, though some banks may post a different rate. For example, TD Bank’s prime mortgage rate is currently 5.35%. Variable rates will be quoted as plus or minus compared to the prime rate.

On June 5, 2024, the Bank of Canada cut its key interest rate by 25 basis points to 4.75%, its first rate cut in over four years. Then on July 24, the central bank cut rates by another 25 basis points to 4.5%, again on September 4 to 4.25%, and then by 50 basis points on October 23 to 3.75%. On December 11, 2024, the Bank cut rates by another 50 basis points to 3.25% and most recently on January 29, 2025, the bank cut rates to 3%. The BoC is widely expected to implement more rate cuts in 2025.

Related: How Mortgage Rates And Interest Rates Work

According to the most recent (December 2024) Monthly Housing Market Report from the Canadian Real Estate Association (CREA) released on January 15, national home sales dipped 5.8% on a month-over-month basis, but are still 13% above May 2023, just before the Bank of Canada’s first interest rate cut. 

““The number of homes sold across Canada declined in December compared to a stronger October and November, although that was likely more of a supply story than a demand story,” noted Shaun Cathcart, CREA’s Senior Economist. “Our forecast continues to be for a significant unleashing of demand in the spring of 2025, with the expected bottom for interest rates coinciding with sellers listing properties for sale in big numbers once the snow melts.”

At the end of 2024, about 128,000 properties were listed for sale on MLS. This is up 7.8% from a year earlier but still below historical averages of around 150,000 listings for this time of the year.

The national sales-to-new listings ratio eased slightly to 56.9%, down from a 17-month high of 59.3% in November. The long-term average is 55%. (A sales-to-new listings ratio between 45% and 65% is consistent with balanced market conditions, with a ratio above 65% indicating a seller’s market and a ratio below 45% indicating a buyer’s market.)

The actual national average home price was $676,640 in December 2024, up 2.5% from a year ago.

At its most recent rate announcement on January 29, 2025, the Bank of Canada (BoC) cut its key interest rate by 25 basis points to 3%, its sixth consecutive rate cut, marking the end of quantitative tightening. While smaller than the last two “supersized” 50 basis point cuts, the BoC was widely expected to continue rate cuts with this announcement.

“Inflation has been close to the 2% target since last summer. Monetary policy has worked to restore price stability…Lower interest rates are boosting household spending and economic activity is picking up,”  said BoC Governor Tiff Macklem in his press conference opening statement. However, he added that the threat of U.S. tariffs created uncertainty with the central bank’s projections, which were not incorporated into their outlook or most recent Monetary Policy Report: “The potential for a trade conflict triggered by new U.S. tariffs on Canadian exports is a major uncertainty. This could be very disruptive to the Canadian economy and is clouding the economic outlook.”

Headline inflation has eased from 8.1% in June 2022 to 1.8% in December 2024 and now firmly sits within the central bank’s 1% to 3% target. In recent months, business and consumer expectations have normalized and there is no longer evidence of broad-based inflationary pressures, noted Macklem; even shelter price inflation, which has been historically elevated, is slowly coming down.

However, at the time of its announcement, Macklem said that U.S. President Trump’s threat to impose 25% tariffs on Canadian imports and a long-lasting and broad-based trade conflict would “badly hurt economic activity in Canada.”  

“Unfortunately, tariffs mean economies simply work less efficiently—we produce and earn less than without tariffs,” said Macklem. “Monetary policy cannot offset this. What we can do is help the economy adjust.”

He added, ”As we consider our monetary policy response, we will need to carefully assess the downward pressure on inflation from weakness in the economy, and weigh that against the upward pressure on inflation from higher input prices and supply chain disruptions.”

Since the central bank’s announcement, President Trump announced that he is moving ahead with a 25% tariff on Canada and Mexico as of Tuesday, February 4, 2025. In response, Canada announced retaliatory tariffs of 25% on $155 billion of U.S. goods. Economists responded that Trump’s move could throw Canada into recession and cause unemployment to surge. 

BMO chief economist Douglas Porter wrote in a research note that while the bank previously forecast two more cuts in April and July, bringing the benchmark rate to 2.5%, “We now look for the quarter-point pace to continue each meeting until October, thus ending at 1.5%.” National Bank chief economist and strategist Stéfane Marion wrote that there is a “strong argument for an emergency or inter-meeting interest rate cut by the BoC” of at least 50 basis points, followed by two additional 25 basis point cuts in March and April, bringing the policy target rate to 2% by spring.

However, after some last-hour negotiations with Prime Minister Trudeau, Trump has announced a 30-day pause on imposing tariffs on Canada and Mexico.

The next scheduled rate announcement is on March 12, 2025.

Related: The Bank of Canada Cuts Key Interest Rate to 3%

Canada’s inflation rate came in line with the Bank of Canada’s expectations though slightly lower than analysts’ forecasts, slowing to 1.8% in December. The deceleration was driven mainly by the fed’s GST/HST holiday that brought down prices for restaurant food and alcohol. Excluding food, December’s inflation rate rose 2.1%.

On a monthly basis, the CPI declined 0.4% in December. The bank’s preferred measures of core inflation also edged down slightly month-over-month, with CPI-median at 2.4% (versus 2.6% in November) and CPI-trim at 2.5% (versus 2.6% in November).

Canadians paid less when dining out in December, with prices down 1.6% year-over-year (marking the index’s first annual decline) and 4.5% compared to November 2024. Prices for alcohol purchased from stores also declined in December, down 1.3% compared with a 1.9% increase in November. Prices fell 4.1% month-over-month.

Prices for toys, games (excluding video games) and hobby supplies decreased 7.2% year-over-year, while the children’s clothing index fell 10.6% in December compared to the same month in 2023.

A note about the GST/HST holiday: Prices in the CPI are final prices, including taxes paid by consumers, meaning that CPI changes due to changes to any taxes. The federal government announced a temporary GST/HST break on certain goods from December 14, 2024 to February 15, 2025; affected goods include food, alcoholic beverages and tobacco/cannabis products, children’s clothing and footwear, diapers, car seats and toys, games, books, newspapers and Christmas trees. Approximately 10% of the all-items CPI is affected by the tax exemption. The impact of the tax break will continue into January 2025 as the full month is impacted, compared to only 18 days in December.

Statistics Canada will release the January CPI figures on February 18, 2025. 

Related: Inflation Rate Slows To 1.8% In December

Here are the posted rates by the major chartered banks for conventional 5-year, 3-year and 1-year fixed mortgages. Keep in mind there may be better rates available at other lenders.

Open vs. Closed Mortgage

An open mortgage offers the flexibility to prepay the loan at any time without penalties. This means you can make additional payments or pay off the entire mortgage before the term ends. On the other hand, a closed mortgage has restrictions on prepayment privileges. You’ll also generally receive a lower interest rate with a closed mortgage.

Fixed-Rate Mortgages

A fixed-rate mortgage has a consistent interest rate throughout the loan term, providing predictability and stability. Your interest rate will remain unchanged regardless of market or economic conditions. Fixed-rate mortgages are popular for borrowers who believe that interest rates will increase.

Related: Best 5-year fixed mortgage rate and 10-year fixed mortgage rates

Variable Mortgages

If your bank’s benchmark rate adjusts during your term, so will your variable mortgage rate. Research from the Bank of Canada suggests that three-quarters of variable-rate mortgages in 2022 had fixed payments. This means a changing interest rate won’t affect your monthly payment, but will adjust the amount of principal you pay off every month. A rising interest rate means each payment contributes more to interest and less to paying off your loan balance.

This fixed payment structure caused the trigger rate debacle, which is the rate at which none of your mortgage payments contribute to the loan principal. Instead, your entire monthly mortgage payment is directed towards interest. “On top of this, sometimes the payments don’t even cover interest and interest is capped to the principal, so when the mortgage is up for renewal you owe more than you started with,” notes Julia Bernier, a licensed independent mortgage agent (level two) with JC Mortgages in Kitchener, Ont.

Is a Variable Rate Better?

A variable rate mortgage is better if you expect interest rates to decrease during your term. If rates drop, you’ll pay off your mortgage faster since more of each payment contributes to the loan principal. However, a fixed-rate mortgage is better if you expect interest rates to increase during your term, or if you want the stability of knowing your payments won’t change, notes Bernier.

The below are the most common factors that affect what interest rate you receive for your mortgage and therefore, how much you pay.

The Type of Mortgage (Refinance, Purchase or Renewal)

Different mortgage types have varying risk profiles. For example, refinancing your mortgage generally increases your interest rate. In contrast, purchase mortgages typically have lower interest rates than refinancing because a purchase is typically an insurable transaction, which is less risky to a bank. “A refinance is not insurable at all so the bank doesn’t have the extra security of the default insurers if the borrower is to default,” notes Bernier. Your renewal interest rate varies with your creditworthiness and market conditions at the time of renewal.

Down Payment

Your mortgage interest rate decreases as the down payment fluctuates. Although counter-intuitive, the Canada Mortgage and Housing Corporation (CMHC) mandates mortgage default insurance for down payments below 20%. While you’ll receive the lowest mortgage rates with CMHC coverage, there are separate fees that can increase your cost of borrowing. Likewise, higher down payments reduce lender risk and your interest rate. Interestingly, lenders have the highest risk with a 20% down payment.

Property Type

Lenders may differentiate between freehold, leasehold and cooperative properties. The ownership structure of each option varies, adjusting lender risk. For example, some lenders charge higher interest rates for cooperative housing because the loan is not secured by a hard asset. Instead, you own shares in a housing corporation that owns the building.

Amortization Period

Extended amortization periods, which are above 25 years, generally have higher interest rates compared to shorter ones. “If you have a 10-year amortization, you are not getting a better rate than a 25-year amortization,” notes Berier. “But if you have a 26- to  30-year amortization,  it may be higher than 25 or less.”

Even if your interest rate doesn’t increase, you’ll end up paying more lifetime interest with a longer amortization period. In contrast, decreasing your amortization will reduce lifetime interest paid, but will increase your monthly mortgage payment.

Mortgage Default Insurance

If your down payment is less than 20% of the property’s purchase price, you’ll be required to obtain mortgage default insurance. This insurance protects the lender in case of default. As such, lenders will charge a lower interest rate if you have default insurance. However, there are separate fees that affect your total cost of borrowing.

Payment Frequency

You can reduce the lifetime interest paid by increasing your payment frequency. This is because you will pay down your mortgage faster. However, closed mortgages have penalties for exceeding annual prepayment thresholds.

Property Location

Provinces have varying market conditions and economic factors that can impact interest rates. For example, provinces with more lender competition and robust consumer profiles will likely see decreased interest rates.

Other Mortgage Costs

In addition to the interest rate, other costs are associated with obtaining a mortgage, such as origination, appraisal and legal fees. These costs can vary among lenders and impact your mortgage’s overall affordability. Your total cost of borrowing is reflected in the mortgage APR.

The below are the most common factors that lenders look at when qualifying you for a mortgage.

Employment Status

Lenders prefer borrowers with stable income, such as full-time employment. Self-employed individuals may face additional requirements to demonstrate income stability.

Credit Score

A higher credit score indicates responsible financial behaviour, increasing your chances of qualifying for a mortgage and securing favourable interest rates. The minimum credit score in Canada to receive a standard mortgage is around 650.

The Ability to Pass a Mortgage Stress Test

Borrowers in Canada must pass a mortgage stress test to ensure affordability, even if interest rates rise. The test assesses their ability to make mortgage payments at a higher interest rate than the one they applied for. The stress test in Canada requires you to meet debt service ratio requirements with a higher interest rate of 5.25% or your mortgage rate + 2%.

Lower Debt Service Ratios

Lenders analyze your ability to manage mortgage payments by calculating your Gross Debt Service Ratio (GDS) and Total Debt Service Ratio (TDS). Lower ratios indicate a lower percentage of income used to cover debts, improving mortgage qualification prospects. Canada’s maximum GDS and TDS ratios are generally 39% and 44%, respectively.

Saving a Larger Down Payment

A larger down payment positively impacts mortgage qualification. It reduces monthly mortgage payments, decreases debt service ratios and helps you pass the stress test. Furthermore, it may result in more favourable interest rates and mortgage terms.

Your mortgage amortization is broken into various terms. In Canada, the standard term is five years. You’ll need to renew your mortgage contract at the end of your term. This is when you can renegotiate your mortgage terms with your existing lender or sign a new contract with a new one.

Short-Term Mortgages

Short-term mortgages have a duration lower than five years. They can help you renew at a lower rate if you expect your creditworthiness or the market interest rates to improve shortly. However, it’s important to note that short-term mortgages require more frequent renewal, which can be a disadvantage if interest rates rise significantly during the renewal period.

Long-Term Mortgages

Long-term mortgages have a duration exceeding five years. They are great to lock in a stable rate for the foreseeable future. However, you can be vulnerable if rates fall significantly below your locked-in rate. As such, a long-term open mortgage combines the benefits of a predictable rate with the flexibility to replace it.

These are the main factors that go into determining what mortgage rates are going to be.

The Bank of Canada’s Overnight Rate

When the Bank of Canada raises or lowers its overnight rate, it affects the interest rates charged on loans, including mortgages. If the overnight rate increases, mortgage rates tend to rise as well.

The Government Bond Market

Government bond yields serve as a benchmark for other interest rates, including mortgage rates. When bond yields rise, mortgage rates generally also increase.

As of writing, the average mortgage rates from our selected lenders are as follows:

3-year variable: 5.18%
3-year fixed: 5.10%
5-year variable: 4.65%
5-year fixed: 4.69%
10-year fixed: 6.50%

Rates as of February 10, 2025

Our chosen lenders for the best mortgage rates in Canada include nesto Inc., Dominion Lending Centres (broker), The Mortgage Centre (broker), B2B Bank Laurentian Bank and BMO. We scored lenders based on their interest rates, timeliness, prepayment privileges, penalty calculation type and availability of discounted rates.

Mortgage prepayment penalties only apply to closed mortgages. Open mortgages have the ability to be paid in full at any time. A prepayment penalty happens if you exceed your monthly payment or go above the percentage that includes your annual prepayment privileges (the amount you can pay above your monthly payment without paying a penalty).

Fixed-Rate Mortgage Penalty Interest Rate

For fixed-rate mortgage penalties, lenders generally charge the higher of three months’ interest, or the interest rate differential (IRD). Lenders commonly calculate the IRD using their posted rates, which can be much higher than your actual rate. As such, you may end up paying more interest in the short term.

Variable-Rate Mortgage Penalty Interest Rate

For variable-rate mortgages, lenders generally charge a penalty of three months’ interest. The interest rate used to calculate the penalty varies by lender, but it is typically your mortgage interest rate or their current prime rate.

A mortgage broker can provide access to a broader range of lenders and mortgage products than a single bank. This can help you save time and secure a better rate. However, comparing offers from multiple lenders is crucial, as commissions from particular lenders can incentivize brokers to promote certain lenders over others.