Current Mortgage Rates Canada: Best Rates & 2026 Forecast

Shopping for a mortgage in Canada this spring means keeping one eye on today’s rates and the other on where they’re headed. With the Bank of Canada holding its policy rate at 2.25% and bond yields fluctuating, lenders are tweaking offers week by week.

Best 5-year fixed rate (May 2026): 4.04% ·
Best 5-year variable rate (May 2026): 3.30% ·
Big 6 bank average 5-year fixed: 4.09% ·
TD 1-year fixed closed posted rate: 5.49% ·
Typical mortgage amortization period: 25 or 30 years

What is the Canadian mortgage rate today?

If you’re shopping for a mortgage right now, the best available 5-year fixed rate is 4.04%, according to WOWA.ca – rate comparison platform, which tracks offers from multiple lenders. The best 5-year variable rate sits at 3.30%. Advertised rates across the market range from 3.7% to 6%, meaning the deal you get depends heavily on the lender, term, and your down payment.

Big banks and digital lenders compete on different levers. While the Big 6 average for a 5-year fixed is around 4.09%, posted rates at banks like TD and RBC are often higher than the best available — TD’s 1-year fixed closed posted rate, for example, is 5.49%.

Are mortgage rates in Canada dropping?

• Variable rates have declined over the past two years and are expected to stay stable through early 2026, per the Canada Mortgage and Housing Corporation (CMHC) – Canada’s housing agency.
• Fixed rates may see slight declines if bond yields continue to fall; the 5-year Canada bond yield recently dropped to 3.0%, notes True North Mortgage – mortgage broker blog.
• However, Mortgage Sandbox – industry analysis warns that significant fixed-rate declines are unlikely without a deep recession.

The implication: variable rates look attractive today, but the window may narrow if the Bank of Canada resumes hiking later in 2026.

Will mortgage rates drop to 3% again?

The short answer from multiple forecasts: not in 2026 or 2027. Oxford Economics, cited by True North Mortgage – mortgage broker blog, expects the Bank of Canada policy rate to hold at 2.25% through the end of 2026. With the prime rate at 4.45%, variable mortgages are already below the psychological 5% mark, but getting to 3% would require the BoC to cut rates by roughly 150 basis points — a scenario that appears unlikely given inflation at 2.8% and unemployment at 6.8%.

Will interest rates go below 5% in 2026?

• Variable rates: already below 5% at 3.30% (best available).
• Fixed rates: the best 5-year fixed at 4.04% is below 5%, but many posted rates from big banks remain above that threshold.

How far will interest rates drop in 2026 and 2027?

• True North Mortgage – mortgage broker blog notes that the 5-year bond yield, which drives fixed rates, fell to 3.0%, suggesting room for slight declines.
• Mortgage Sandbox – industry analysis forecasts bond yields staying in the 3.0–3.5% range through 2026, with an upward bias.
• CMHC’s housing outlook sees fixed rates likely to rise because long-term bond yields remain high.

The catch: no credible forecast has 5-year fixed rates touching 3% again before 2028. Variable rates could dip toward 2.5% if the BoC cuts deeply, but that would require a sharp economic downturn.

How much is a $400,000 mortgage payment for 30 years?

The exact monthly payment depends on the interest rate and amortization period. Using WOWA.ca – rate comparison platform’s mortgage calculator, the average monthly payment on a competitively priced home with a 25-year amortization is $2,790, including $1,820 in interest. For a $400,000 mortgage at the current best 5-year fixed rate of 4.04% over 30 years, the principal and interest payment would be roughly $1,920 per month — but that figure assumes you qualify for that best rate and meet the lender’s down payment requirements.

What’s the mortgage payment on a $400K loan at various rates?

Source for best rates: WOWA.ca – rate comparison platform; TD posted rate from True North Mortgage – mortgage broker blog (TD’s 1-year fixed closed posted rate of 5.49%).

Pattern: a 1.45 percentage point difference more than doubles total interest costs. Even a modest decrease in rate yields thousands in savings over the life of the loan.

What income do you need for a $400,000 mortgage in Canada?

Canadian lenders use the mortgage stress test to qualify borrowers. As of May 2026, the stress test rate is the greater of 5.25% or the contract rate plus 2%. At the current best fixed rate of 4.04%, the qualifying rate is 6.04%. For a $400,000 mortgage with a 30-year amortization and a 10% down payment, lenders typically require a gross household income between $90,000 and $110,000, depending on property taxes and heating costs.

Can a 70-year-old woman get a 30-year mortgage?

• Age is not a prohibited factor under Canadian mortgage regulations. Lenders focus on income, assets, and credit history.
• Seniors with sufficient pension, RRSP, or rental income can qualify for a 30-year amortization, though some lenders may cap the amortization at 25 years for borrowers over 65.
• CMHC notes that age alone does not affect eligibility; the key is ability to service the debt (CMHC – Canada’s housing agency).

The trade-off: older borrowers may face shorter amortization limits, which increase monthly payments, but they also likely have higher home equity and lower loan-to-value ratios.

Is 3.5% a good interest rate?

Compared to today’s market, 3.5% is excellent. The best variable rate is 3.30%, but the best fixed rate is 4.04%. A fixed rate of 3.5% would be below current market levels and would save a buyer over $100,000 in interest on a $400,000 mortgage compared to a 4.5% rate. For context, rates were at or below 3% during 2020–2021 when the Bank of Canada slashed its policy rate to 0.25%. Returning to 3.5% would require the BoC to cut its policy rate by about 125 basis points — possible if the economy weakens, but not forecast by any major bank as of May 2026.

Timeline: Canadian mortgage rates through 2027

• May 2026: Best 5-year fixed at 4.04%, variable at 3.30% (WOWA.ca – rate comparison platform). BoC policy rate at 2.25%.
• 2026 (Q3–Q4): BoC expected to hold rate steady; some analysts see 5-year fixed falling toward 3.5% if bond yields decline further (True North Mortgage – mortgage broker blog).
• 2027: No major forecaster predicts 3% fixed rates. Variable may approach 2.5–3% if BoC cuts deeply, but recession risk remains.

The pattern: near-term stability with a slow drift lower for variable rates, while fixed rates stay range-bound above 3.5%.

What’s confirmed and what’s unclear

“Variable mortgage rates have declined over the past two years and are expected to remain stable through the first half of 2026.”

— CMHC Housing Market Outlook – Canada’s housing agency

“The 5-year Canada bond yield has fallen to 3.0%, which could allow fixed mortgage rates to decline slightly in the coming months.”

— True North Mortgage – mortgage broker blog

The forward stake is clear: variable-rate holders enjoy low payments now, but the Bank of Canada’s next move will decide whether that persists. Fixed-rate buyers lock in certainty at levels that, while not rock-bottom, are historically decent.

For those evaluating their options, current variable mortgage rates in Canada have become increasingly attractive compared to fixed-rate products.

Frequently asked questions

Related reading: Canada Bank Interest Rates 2026: BoC Rate & Savings Guide · Canada Bank Interest Rates 2026: BoC, Mortgage & Savings