Shopping around for the best rate can save you thousands on your mortgage. Use Ratehub.ca’s mortgage rate finder* below to compare the mortgage rates from the big banks and brokers instantly.

Input your location, the price of the home you want to purchase and your down payment amount. The mortgage rate finder will show you the lowest rates (and corresponding monthly payments) according to your inputs. You can also adjust the mortgage term and type depending on your needs. Plus, find out about prepayment options and other features that can help you save even more money and pay down your mortgage faster.

Once you’ve found a mortgage you would like to know more about, simply click the “Inquire” button and fill out the contact form to get an obligation-free call back from a representative of the provider you’ve selected.

What is happening with mortgage rates today? 

In recent decades, Canadian home owners have enjoyed some of the lowest rates in history. Interest rates reached their high point in the 1980s (with five-year fixed-rate mortgages surpassing 20%) and have gradually fallen since then. 

Unfortunately for new mortgage applicants, it appears the reign of ultra-low rates is coming to an end. Since early this year, the rates on both fixed- and variable-rate mortgages have been climbing as the Bank of Canada tries to get inflation under control. 

On Dec. 7, 2022, the Bank raised the benchmark rate (or overnight rate) by 50 basis points, the seventh consecutive interest rate hike this year. This increase brings the overnight rate to 4.25% from the previous 3.75%, the highest it has been since 2008.

During normal economic times, the BoC typically increases its benchmark rate in increments of no more than 0.25%. Prior to the April 2022 rate announcement, the Bank hadn’t raised the overnight rate by more than 0.25% in one shot since May 2000—more than 20 years ago.

How to find the best mortgage rates in Canada 

Comparison shopping isn’t just for big ticket 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 can add up to huge savings.

Comparing mortgage rates online is a good first step towards 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 broad categories of mortgages in Canada: fixed-rate mortgages and variable-rate mortgages. Lenders use a different approach when determining the rate of variable and fixed mortgages. 

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. 

A variable-rate mortgage is one in which the rate (and therefore the amount of interest paid) can fluctuate with 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. 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 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 a network of lenders to help you find the best mortgage rate. 

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.

More on mortgages:

• The best five-year fixed mortgage rates in Canada 2022
• A guide to five-year variable mortgage rates
• The complete guide for first-time home buyers in Canada

• Every mortgage calculator you will ever need