🇨🇦 Today's Canadian Mortgage Rates

The overnight rate is the interest rate at which major Canadian financial institutions lend and borrow one-day funds from each other. The Bank of Canada sets a target for this rate and adjusts it at eight scheduled announcements per year (roughly every 6–7 weeks).

How it flows to variable mortgage rates

Within days of a BoC rate decision, major banks adjust their prime rate by the same amount. Variable-rate mortgages (VRMs) and HELOCs are priced as "prime minus X%" — so if the BoC cuts by 0.25%, your variable rate drops by 0.25% and your monthly payment falls accordingly. On a $500,000 variable mortgage, each 0.25% cut saves roughly $100–$125/month.

Fixed rates are different

Fixed mortgage rates in Canada are driven by Government of Canada 5-year bond yields, not the overnight rate. It is possible — and common — for fixed rates to move in the opposite direction of the overnight rate in the short term.

Canada's prime rate is set by the major chartered banks (RBC, TD, BMO, Scotiabank, CIBC) and has historically tracked the BoC overnight rate with a spread of approximately 2.2 percentage points.

Products priced off prime

• Variable-rate mortgages: typically Prime − 0.5% to Prime − 1.0% for well-qualified borrowers
• HELOC (Home Equity Line of Credit): typically Prime + 0.5%, capped at your equity
• Variable personal loans and LOCs

Stress test and prime rate

For variable-rate mortgages, the stress test qualifies you at the higher of your contract rate + 2% or 5.25%. As prime rises, so does your contract rate, making stress test qualification harder. The Affordability Calculator (Canada) includes the stress test in its calculations.

The 5-year fixed rate is the most common mortgage term in Canada. Your rate and payment are locked for 5 years, after which you renew at market rates. The rate shown is for uninsured new loans with a 5-year or longer term (BoC series V122667786).

CMHC insurance and the 5yr fixed

If your down payment is less than 20%, your mortgage must be CMHC-insured. Insured mortgages often get slightly better rates from lenders because the credit risk is assumed by CMHC. However, you pay an insurance premium of 0.6–4% of the mortgage amount (added to your loan). See the Canada Mortgage Calculator for province-specific CMHC premium calculations.

Stress test at current 5yr fixed rate

With a 5-year fixed rate of 4.31%, the stress test rate is 6%. On a $600,000 property in Ontario, a buyer with $100k income qualifying under GDS/TDS rules at the stress test rate would typically afford approximately $400,000–$450,000 in mortgage. Use the Affordability Calculator for your exact numbers.