Find the best mortgage rates in Canada

Shopping around for the best rate can save you thousands on your mortgage. To instantly compare rate types and terms, click on the filters icon beside the down payment percentage in the Ratehub mortgage rate finder below. Input your location, the price of the home you want to purchase and your down payment amount. You can also adjust the mortgage term and type. Then simply tap “Inquire”  to get more info.

Comparison shopping isn’t just for items like TVs and cars. In fact, the most significant comparison shopping you may ever do in your life involves hunting for the best mortgage rate. Because when it comes to mortgages, even a fraction of a percentage point can add up to huge savings.

Comparing mortgage rates online is a good first step toward securing a competitive rate. However, you’ll also want to consider the many other factors that go into finding the best mortgage for your needs. For example, you may need the flexibility of an open mortgage (versus a closed mortgage that doesn’t allow you to increase your mortgage payments). Or you may want a mortgage with a shorter term, such as three years instead of five.

Going beyond the rate and considering things like payment flexibility, the amortization and terms of your mortgage contract, and any potential penalty and administration fees tied to breaking the agreement, will ensure you have a comprehensive understanding of all the borrowing costs of your mortgage.

How lenders determine their mortgage rates 

There are two major types of mortgages in Canada: fixed-rate mortgages and variable-rate mortgages. Lenders use different approaches when determining the rate of variable and fixed mortgages.

Fixed mortgage rates

A fixed-rate mortgage is one in which a borrower’s rate of interest remains the same over the entire term of their mortgage. Lenders’ fixed mortgage rates are closely tied to the price of five-year government bonds. As bond yields rise, the value of the bonds decreases and banks compensate for this loss by upping the rates on their fixed-rate mortgages. (The new rates apply only to fixed-rate mortgage applicants and those renewing their existing contract.) In contrast, when bond yields drop, banks’ fixed mortgage rates tend to fall. 

Variable mortgage rates

A variable-rate mortgage has a fluctuating rate (and therefore the amount of interest paid) based on the changes in the bank or lender’s prime rate. Lenders’ prime rates are based on the Bank of Canada’s overnight rate (also called the benchmark, target or policy interest rate). When the Bank raises its overnight rate (which it does when trying to curb inflation), Canada’s financial institutions typically raise their rates accordingly. 

There are two kinds of variable-rate mortgages in Canada. With a typical variable-rate mortgage, the borrower’s payment does not change with fluctuations in the prime rate; instead, changes in the rate determine how much of your mortgage payment goes towards paying interest versus principal on the mortgage. 

There are also adjustable-rate mortgages. With these, the borrower’s mortgage payment changes as the lender’s prime rate goes up or down. 

Which type of mortgage rate is best?

That depends on a few things. Since the rate on a variable-rate mortgage can change during the term, they offer less financial certainty than fixed-rate mortgages. That said, the history of mortgage rates in Canada suggests that variable-rate mortgage holders have tended to pay less interest on their mortgage over time than those with fixed-rate mortgages. 

There are other factors, aside from the state of the economy, that will influence the rate a mortgage applicant is offered. To get the best mortgage rates in Canada, you generally have to have a high credit score. Those with a low credit score may not be able to qualify for a mortgage from one of the big banks. Their only option may be through an alternative lender, which will likely charge a higher rate. Similarly, mortgages without mortgage default insurance often come with a higher interest rate than those without, because uninsured mortgages carry a greater risk for the lender. 

Video: How the Bank of Canada’s interest rate affects you

Should I use a mortgage broker or lender? 

Many Canadian borrowers have traditionally gone directly to a mortgage provider, such as one of Canada’s big banks, to get a mortgage. There are certain advantages to applying for a mortgage this way: You may have an established relationship with the bank or mortgage provider, which can simplify the application process, and the institution may be able to offer you other financial products (such as a savings account or line of credit) in addition to a mortgage. 

However, there are many reasons to consider working with a mortgage broker—a licensed professional who negotiates with multiple mortgage lenders to help you find the best mortgage rates. 

Mortgage brokers act as an intermediary between lenders and borrowers, and their services are typically free for the borrower; mortgage brokers are compensated via a commission fee paid by the mortgage lender that you ultimately choose to sign a contract with. You should still do your due diligence to ensure the mortgage broker is licensed, working on your behalf and offering you a mortgage that is suitable for you. 

Generally, it’s a good idea to compare mortgage rates from a range of mortgage providers and brokers. Some brokers only work with a small selection of lenders—and some lenders choose not to work with mortgage brokers at all—meaning you could be missing out on potential savings. Comparing offers from a range of sources is one of the best ways to get a competitive mortgage rate.

How much of a down payment should I have?

In Canada, when buying a home, whether that’s a house, townhome or condo, the minimum amount needed as a down payment depends on the purchase price of the property. Typically, you’ll fall under one of three scenarios.

Scenario	Minimum down payment required
The property costs less than $500,000	• 5% of the purchase price
The property costs between $500,000 and $1 million	• 5% on the first $500,000 + • 10% on the portion above $500,000
The property costs $1 million or more	• Minimum of 20% of the purchase price

You can use our Mortgage down payment calculator to figure out what your down payment should be. 

Should you use an FHSA to buy a house?

Yes, if you qualify. The first home savings account (FHSA) is a registered account. It can be used as a savings account or an investment account, depending on the account you open and where. You must be 18 years of age or older, a resident of Canada and, of course, be a first-time home buyer.

You can deposit up to $8,000 per year into your FHSA, up to a lifetime limit of $40,000. Is that enough for your house? It depends on your time horizon and how long you’re able to let your money or investments grow. But for the sake of an example, if you had $40,000 saved in your FHSA, you could buy a home worth $650,000. The average home price in Canada was $685,809 in February 2024, according to the Canadian Real Estate Association. That tells you that you’ll want your money to grow.

Thankfully, the FHSA works similarly to a registered retirement savings plan (RRSP) and a tax-free savings account (TFSA). Any money you contribute to a FHSA is tax-deductible, and what you withdraw tax-free, like with a TFSA. Both are on the condition you use it toward the purchase of your first home.

Check out the best FHSA rates in Canada.

Read more about mortgages:

• The complete guide for first-time home buyers in Canada
• The Canadian mortgage stress test, explained

• Mortgage affordability calculator
• Tools to calculate your mortgage payments and costs in Canada