Best Fixed Mortgage Rates In Canada For 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, which includes banks, credit unions and online lenders. Lenders that didn’t provide their mortgage rates or operate in fewer than four provinces or territories were not eligible for review.

Our rates 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 based on the following factors:

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

Please do not take the rates posted here as gospel. They are intended to only offer a ballpark and sample of the rate a lender may offer for that particular mortgage term. That does not mean that you will qualify for the above rates or that they haven’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 January 30, 2025, the 5-year benchmark bond yield is 2.835%, down 64.17 basis points (or 0.6417%) from one year ago and down 12.89 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

A fixed-rate mortgage in Canada is a loan for purchasing a property where the interest rate remains constant throughout the term of the mortgage. This consistency means that your monthly mortgage payments are predictable, unaffected by the ebbs and flows of market interest rates.

When considering a mortgage for your home purchase or refinancing in Canada, it’s essential to weigh these pros and cons carefully to determine if a fixed-rate mortgage aligns with your personal financial situation and long-term financial goals.

Pros:

• Predictability: Stable monthly payments facilitate easier budgeting and financial planning.
• Protection against rate increases: Your rate stays the same even if the market rates rise, providing a shield against the uncertainty of interest rate fluctuations.
• Long-term planning: With consistent payments, it’s easier to plan for other long-term financial goals, like retirement or education savings.
• Attractive in a low-rate environment: If you lock in a mortgage when rates are historically low, you benefit from these low rates for the entire term of your mortgage.
• Appeal to risk-averse borrowers: For homeowners and prospective homebuyers who prefer not to gamble on future interest rate movements, fixed-rate mortgages offer a stress-free solution.

Cons:

• Potentially higher rates: Fixed-rate mortgages might start with a slightly higher rate than variable-rate mortgages, meaning you might pay more initially.
• Less flexibility: Opting out of a fixed-rate mortgage often incurs significant penalties, especially if you decide to refinance or sell your home before the term ends.
• Prepayment limitations: Fixed-rate mortgages often have stricter prepayment limitations compared to variable-rate mortgages, which can be a drawback if you come into a sum of money you wish to use to pay down your mortgage.
• Potential for overpayment: If the market rates decrease substantially, you may end up paying more in interest compared to what you would have with a variable-rate mortgage.

The bottom line? While fixed-rate mortgages offer stability and predictability, they may lack the flexibility and potential interest savings of variable-rate mortgages. It’s crucial to consider your financial stability, risk tolerance and the current economic environment when choosing the type of mortgage that’s right for you.

Related: Should I Choose a Fixed-Rate or Variable-Rate Mortgage?

When considering a fixed-rate mortgage, be aware of these fees:

• Arrangement fees are the costs charged by lenders for setting up the mortgage.
• Legal and valuation fees are the additional costs associated with the legal aspects of purchasing a home and appraising its value.
• Early Repayment Charges (ERCs): If you decide to pay off your mortgage early or switch to a different product before the end of your mortgage term, ERCs can be substantial.

Choosing the term of your fixed-rate mortgage is a balancing act between stability and flexibility:

• Shorter terms, like two or three years, often offer lower rates and more flexibility but require frequent renewals.
• Longer terms, such as five or 10 years, provide stability but at the cost of higher rates and less flexibility to respond to changing life circumstances or market conditions.

Ultimately, your decision should align with your long-term financial goals and risk tolerance.

Comparing fixed-rate mortgages involves evaluating not just the interest rates but also the associated fees, lender’s reputation and customer service quality. You should consider the total cost over the term of the loan, including arrangement fees, and assess the portability and flexibility of the mortgage, especially if you plan to move or refinance within the mortgage term.