Canadian Bank Mortgage Rates

Canadian mortgage rates are directly influenced by two benchmarks: the Bank of Canada overnight target rate (currently 2.25% as of May 2026), which drives variable-rate mortgages and home equity lines of credit, and the Government of Canada 5-year bond yield, which drives fixed-rate mortgage pricing. When the BoC raises or lowers its policy rate, Canadian banks typically adjust their prime rate — and therefore variable mortgage rates — within days.

The Canadian prime rate is currently 4.45% at all major banks. Variable-rate mortgages are priced as prime minus a discount — for example, a "prime minus 0.55%" variable mortgage currently has an effective rate of 3.90%. The discount is negotiated at origination and remains fixed for the mortgage term, even as the prime rate changes. This means your variable-rate payment fluctuates with BoC decisions throughout your term.

Fixed-rate mortgages lock in your interest rate for the full term (most commonly 5 years in Canada), giving you payment certainty regardless of what the Bank of Canada does. In May 2026, the best 5-year fixed rates from major Canadian banks range from 3.99% (insured) to 4.44% (conventional). Fixed rates have declined significantly from the 2023 peak of 5.54% as bond yields have come down alongside improving inflation data.

When comparing mortgage rates across Canadian banks, always look at the Annual Percentage Rate (APR) rather than just the advertised rate — it includes fees and reflects the true cost of borrowing. Also note that "posted rates" are a negotiating starting point; most borrowers can negotiate a discount of 1–2% below posted. Use HomeWise to see the actual rates being offered, then use our calculator to compare the total cost of each option over your full amortization.