Mortgage Rate History Canada (1975–2026) | Historical Rates & Trends

Canada mortgage rate history: current rates (March 2026)

The Bank of Canada’s policy rate stands at 2.25% as of January 2026, following a cumulative 250 basis points of cuts from the peak of 5.00% in mid-2024. Posted mortgage rates at chartered banks currently stand at:

Posted rates are set by chartered banks and reported by the Bank of Canada. Discounted rates — what most borrowers actually pay — are typically 1.5–2.5% lower depending on the lender, property type, and borrower qualifications.

Discounted rates shown above are estimated typical rates offered by lenders and brokers — approximately 1.5–2.5% below the posted bank rates shown in the tables below. For the full 50-year history starting from 1975, see the posted rate tables below.

Jump to: 5-Year Fixed History · Variable Rate History · Term Comparison (1, 3, 5-Year) · 10-Year Fixed · Key Historical Periods · Bank of Canada Rate

5-year fixed mortgage rate history

The 5-year fixed rate is the most popular mortgage term in Canada, chosen by roughly 50% of borrowers. Here is the complete history of the 5-year fixed posted rate since 1975:

The 5-year fixed posted rate has ranged from a low of 4.64% (2015–2017) to an all-time high of 19.25% (1982). The long-term average since 1975 is approximately 9.2%.

Variable mortgage rate history

Variable (or adjustable) rates are tied to the prime rate, which follows the Bank of Canada’s overnight rate. They tend to be lower than fixed rates in most years, but carry the risk of increasing during tightening cycles.

Fixed vs. variable: which has been lower?

Over the 52-year period from 1975–2026, variable rates have been lower than 5-year fixed rates in 42 of 52 years — roughly 81% of the time. The exceptions were concentrated in two specific periods:

• 1979, 1981, 1989–1990: During aggressive BoC tightening when short-term rates spiked above long-term rates (inverted yield curve)
• 2023: The fastest tightening cycle in 40 years briefly pushed variable rates above fixed for the first time since 1990

The average spread between the 5-year fixed and variable rate has been approximately 1.8 percentage points in favour of variable. However, the 2022–2023 tightening cycle demonstrated that during periods of rapid rate hikes, variable borrowers face significant payment shock.

Posted 1-year, 3-year, and 5-year rate history

For detailed comparison across all fixed terms, the following table shows the posted rates for 1-year, 3-year, and 5-year fixed mortgages at chartered banks since 1980:

In a normal yield curve environment, shorter terms carry lower rates because lenders face less risk. The 1-year fixed has been the lowest of the three fixed terms in the vast majority of years. The notable exception was 2023–2024, when the inverted yield curve meant the 5-year fixed was actually cheaper than the 1-year — a rare situation caused by the market expecting future rate cuts.

10-year fixed mortgage rate overview

The 10-year fixed mortgage is the longest standard fixed term available from most Canadian lenders. It provides maximum payment stability but typically carries a 0.5–1.5% premium over the 5-year fixed rate. The 10-year term is not as widely tracked historically as the 1-, 3-, and 5-year terms, but it has gained popularity during periods of low rates when borrowers wanted to lock in for longer.

Here are estimated typical discounted 10-year fixed rates compared to 5-year fixed over the past 20 years:

The 10-year premium widens during periods of rate uncertainty — when markets expect future volatility, lenders charge more for the extra years of certainty. This premium narrowed to just 0.30% in 2018 (a relatively stable rate environment) and widened to 1.15% in 2026 (reflecting uncertainty around trade tariffs and global inflation).

The 10-year term is most suitable for borrowers who plan to stay in their home for the full term and want to avoid the risk and cost of renewing into a potentially higher rate environment.

Note: 10-year fixed mortgage rates are not officially reported by the Bank of Canada in their posted rate tables. Rates shown are estimates based on market data and typical lender offerings.

Key periods in Canadian mortgage rate history

The 1981 crisis: mortgage rates hit 18%+

The early 1980s saw the most extreme mortgage rates in Canadian history. The Bank of Canada, under Governor Gerald Bouey, raised the bank rate aggressively to combat stagflation — the toxic combination of double-digit inflation (12.5% in 1981) and economic stagnation.

• 5-year fixed posted rate: 18.13% (September 1981)
• Variable rate: 19.20% (1981)
• 1-year fixed: 18.00% (1981)

For context, a $300,000 mortgage at 18% over 25 years would carry a monthly payment of roughly $4,500 — compared to about $1,850 at today’s 6% posted rate. The severe rates triggered a deep recession and a housing downturn, with prices falling 10–15% in many markets.

The long decline: 1982–2017

After peaking in 1981–1982, Canadian mortgage rates entered a 35-year secular decline. The 5-year fixed posted rate fell from 19.25% in 1982 to 4.64% in 2015 — a drop of nearly 15 percentage points across three and a half decades. This decline was driven by:

• Inflation targeting: The Bank of Canada adopted a 2% inflation target in 1991, anchoring expectations and reducing the need for high rates
• Globalization: Global capital flows and competition among financial institutions compressed lending spreads
• Demographics: An aging population and slower growth reduced natural interest rates worldwide
• Technology: Financial innovation improved efficiency and reduced intermediation costs

This structural decline created an unprecedented tailwind for Canadian real estate, as falling rates steadily increased purchasing power. A borrower in 1982 could afford roughly 40% less home than the same borrower in 2017 at the same income, purely due to the rate differential.

The COVID-19 emergency: 2020–2021

The Bank of Canada slashed its overnight rate to 0.25% in March 2020 — the effective lower bound — in response to the pandemic. This pushed variable mortgage rates to historic lows:

• Variable rate: 2.15% (posted, 2020–2021)
• 5-year fixed posted: 4.79% (2021)
• Actual discounted 5-year fixed rates fell as low as 1.5–2.0% — levels never seen before

Combined with pandemic-era fiscal stimulus and remote work demand, rock-bottom rates fuelled a massive housing boom. Canadian home prices surged approximately 50% between early 2020 and February 2022.

The 2022–2023 tightening: fastest hikes in 40 years

Starting in March 2022, the Bank of Canada raised its overnight rate from 0.25% to 5.00% in just 16 months — the fastest tightening cycle since the Volcker era. The impact on mortgage rates was dramatic:

• Variable rates surged from 2.15% to 6.65%
• 5-year fixed posted rate rose from 4.79% to 6.79%
• For the first time since 1990, variable rates exceeded fixed rates (2023)
• Monthly payments on a typical $500,000 variable mortgage increased by roughly $1,600/month

The rapid hikes caused significant financial stress for variable-rate borrowers and contributed to a housing market correction, with average prices falling approximately 20% from peak levels before stabilizing.

The 2024–2025 easing cycle

The Bank of Canada began cutting rates in June 2024, reducing the overnight rate from 5.00% to 2.25% by January 2026 through seven consecutive cuts totalling 275 basis points. This was one of the most aggressive easing cycles on record.

• Variable rates dropped from 6.65% to 4.15%
• The prime rate fell from 7.20% to 4.45%
• Fixed rates were slower to follow, as bond yields remained elevated due to global inflation concerns and fiscal uncertainty

As of March 2026, the Bank of Canada paused its cutting cycle at 2.25%, with markets pricing in the possibility of further cuts depending on trade conditions and economic data. The next announcement is scheduled for March 18, 2026.

Bank of Canada overnight rate history

The Bank of Canada’s policy rate is the anchor for all Canadian interest rates. Here is the complete schedule of rate decisions from the 2022–2026 tightening-and-easing cycle:

How mortgage rates are set in Canada

Understanding how mortgage rates are determined helps contextualize the historical data:

Fixed mortgage rates

Fixed mortgage rates are primarily driven by Government of Canada bond yields — specifically, the 5-year government bond yield for 5-year fixed mortgages. When bond yields rise (because investors expect higher inflation or economic growth), fixed mortgage rates follow. The typical markup over the 5-year bond yield is about 1.5–2.0 percentage points.

This is why fixed rates sometimes move independently of the Bank of Canada’s policy rate — they respond to bond market expectations about the future, not just current short-term rates.

Variable mortgage rates

Variable mortgage rates are directly tied to the prime rate, which moves in lockstep with the Bank of Canada’s overnight rate. When the BoC cuts or raises rates, prime adjusts by the same amount, and variable mortgage rates follow. The typical variable mortgage rate is quoted as “prime minus X%” where X is the discount offered by the lender.

Why posted vs. discounted rates matter

The rates in the tables above are posted rates — the standard rates advertised by chartered banks. In practice, almost no borrower pays the posted rate. Discounted rates offered by mortgage brokers and lenders are typically 1.5–2.5% lower. The posted rate is still important because:

• It’s used to stress test mortgage applicants (the qualifying rate is the higher of the posted 5-year rate or the contract rate + 2%)
• It’s the only rate with consistent historical data going back to the 1970s
• Mortgage penalties for breaking a fixed-rate mortgage are often calculated using posted rates

Mortgage rate outlook: 2026 and beyond

As of March 2026, consensus expectations for mortgage rates:

Key factors to watch:

• Trade tariffs: Ongoing trade tensions with the United States create uncertainty about growth and inflation — potentially delaying further BoC cuts
• Inflation trajectory: Core inflation has largely returned to the 2% target, supporting the case for lower rates
• Housing market recovery: A significant rebound in housing demand could push bond yields (and fixed rates) higher
• US Federal Reserve: The Fed’s rate path influences Canadian bond yields and constrains the BoC’s ability to diverge significantly from US rates
• Employment data: A weakening labour market would support further cuts; resilient employment could keep rates steady

Glossary

• Posted rate: The standard mortgage rate published by chartered banks, used for stress test qualification
• Discounted rate: The actual rate most borrowers pay, typically 1.5–2.5% below posted
• Prime rate: The rate set by commercial banks, currently 4.45%, typically about 2.2% above the BoC overnight rate
• Overnight rate: The Bank of Canada’s policy interest rate — the rate banks charge each other for overnight loans
• Basis point (bp): One hundredth of a percentage point (0.01%). A 25bp cut means a reduction of 0.25%
• Yield curve: The relationship between short-term and long-term interest rates. A “normal” curve has higher long-term rates; an “inverted” curve (higher short-term) signals expected rate cuts
• Stress test: The requirement that mortgage borrowers qualify at the higher of the posted 5-year rate or their contract rate plus 2%
• Variable rate mortgage: Rate fluctuates with prime rate; payments may be fixed (adjustable payment) or change (variable payment)
• Fixed rate mortgage: Rate locked in for the term; payments remain the same regardless of market rate changes

Related calculators

• Mortgage Calculator — calculate monthly payments at any interest rate
• Mortgage Affordability Calculator — see how much you can afford at current rates
• Mortgage Stress Test Calculator — check if you qualify under the stress test
• Mortgage Refinance Calculator — see if refinancing at today’s rates saves you money
• Mortgage Renewal Calculator — compare renewal options at current rates
• Fixed vs Variable Mortgage — detailed comparison of fixed and variable rate mortgages

Data sources

• Bank of Canada — Posted Rates Offered by Chartered Banks — official source for historical posted mortgage rates (1-year, 3-year, 5-year fixed, prime)
• Bank of Canada — Policy Interest Rate — overnight rate decision history
• Statistics Canada, Table 10-10-0145-01 — chartered bank interest rates
• Canada Mortgage and Housing Corporation — mortgage market analysis and reports