Canada Mortgage Rates History
(1975 to 2024)
Weekly Average Historical Posted Mortgage Rates (1975 to 2024)
| Date | 1-Year Fixed | 3-Year Fixed | 5-Year Fixed | Prime |
|---|
Source: Bank of Canada, weekly average posted interest rates by Canada’s six major banks (RBC, TD, Scotiabank, BMO, CIBC, and National Bank).
Today’s Mortgage Rates
| 1-Year Fixed | 2-Year Fixed | 3-Year Fixed | 4-Year Fixed | 5-Year Fixed | 5-Year Variable | |
|---|---|---|---|---|---|---|
| Lowest Rates | 6.39% | 5.44% | 4.79% | 4.89% | 4.69% | 5.9% |
| Average Rates (10 Lenders) | ||||||
| 30-Days Change of Average Rates |
| Term | Lowest Rates | Average Rates (10 Lenders) | 30-Days Change of Average Rates |
|---|---|---|---|
| 1-Year Fixed | 6.39% | % | NaN bps lower |
| 2-Year Fixed | 5.44% | % | NaN bps lower |
| 3-Year Fixed | 4.79% | % | NaN bps lower |
| 4-Year Fixed | 4.89% | % | NaN bps lower |
| 5-Year Fixed | 4.69% | % | NaN bps lower |
| 5-Year Variable | 5.9% | % | NaN bps lower |
The basket of 10 lenders includes: CIBC, BMO, TD, Scotiabank, RBC, National Bank, Desjardins, nesto, Tangerine, First National
*Prior to March 2024, HSBC Canada was included in the basket
What You Should Know
- The lowest 1-Year fixed mortgage rate in history was 2.79% in 2021, and the highest was 21.75% in 1981.
- Mortgage rates have been generally decreasing since the 1980’s.
- While mortgage rates have been trending downwards, rising home prices in Canada are causing mortgage payments to soar.
| 1-Year Fixed | 2-Year Fixed | 3-Year Fixed | 4-Year Fixed | 5-Year Fixed | 5-Year Variable | |
|---|---|---|---|---|---|---|
| 6.63% | 6.09% | 5.31% Get Up To $4,000 Cash Back* With A New Mortgage. | 5.26% Get Up To $4,000 Cash Back* With A New Mortgage. | 5.09% Get Up To $4,000 Cash Back* With A New Mortgage. | 6.45% Get Up To $4,000 Cash Back* With A New Mortgage. |
| Term | Rate |
|---|---|
1-Year Fixed | 6.63% |
2-Year Fixed | 6.09% |
3-Year Fixed | 5.31% |
4-Year Fixed | 5.26% |
5-Year Fixed | 5.09% |
5-Year Variable | 6.45% |
| 5-Year Fixed | 5-Year Variable | |
|---|---|---|
| 5.09% Get Up To $4,000 Cash Back* With A New Mortgage. | 6.45% Get Up To $4,000 Cash Back* With A New Mortgage. |
| 5-Year Fixed | 5-Year Variable |
|---|---|
5.09% Get Up To $4,000 Cash Back* With A New Mortgage. | 6.45% Get Up To $4,000 Cash Back* With A New Mortgage. |
| 1-Year Fixed | 2-Year Fixed | 3-Year Fixed | 4-Year Fixed | 5-Year Fixed | 5-Year Variable |
|---|---|---|---|---|---|
| 6.39% | 5.44% | 4.79% | 4.89% | 4.69% | 5.9% |
| Term | Rate |
|---|---|
1-Year Fixed | 6.39% |
2-Year Fixed | 5.44% |
3-Year Fixed | 4.79% |
4-Year Fixed | 4.89% |
5-Year Fixed | 4.69% |
5-Year Variable | 5.9% |
What are posted mortgage rates?
Posted mortgage rates are the interest rates that financial institutions publish and advertise, such as on their websites. They're not necessarily the actual rate the borrowers will receive, as lenders will often give discounts or have special mortgage rates. The rates shown in the historical graph and table above are the average posted mortgage rates from Canada’s major banks, collected by the Bank of Canada since 1975.
Mortgage Rate History in Canada
Mortgage rates have a big impact on the cost of homeownership in Canada, and this has ripple effects on Canadian home prices and the economy as a whole. The graph above shows the mortgage rate history in Canada from 1975 to 2024, based on the posted rates by Canada’s six major banks and collected by the Bank of Canada. The historical rates graph also includes the prime rate, which is used as a benchmark for variable mortgage rates offered by Canadian lenders.
How have mortgage rates changed in 2024, and since 1975? The graph shows that Canadian mortgage rates have been on an overall downward trend since the early 1980’s, when mortgage rates in Canada peaked amid an era of high inflation. Since then, there have been fluctuating periods of increases and decreases throughout the years, with mortgage rates dropping to historic lows during the COVID-19 pandemic in 2020 and 2021.
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What Is the Lowest Mortgage Interest Rate in History?
The lowest mortgage rate in Canadian history was 2.79% in January 2021 for a 1-year fixed mortgage. This rate lasted for a month, sticking around until October 2021, giving borrowers an incredibly low rate that would stretch out to 2026.
In the wake of the COVID-19 pandemic, with interest rates dropping to record lows, variable mortgage rates dropped to record lows as well. In late 2021, the 5-year variable mortgage rate dropped to as low as 0.88%.
What Is the Highest Mortgage Interest Rate in History?
The highest mortgage rate in Canadian history was 21.75% in August 1981 for a 5-year fixed mortgage. This rate stayed at this all-time high until October 1981 before decreasing rapidly over the following months. In fact, mortgage rates two years later in 1983 were almost half of what they were during this peak in mortgage rates in 1981!
Why Do Historical Mortgage Rates Matter?
Mortgage rates can have a big impact on the cost of owning a home. That’s why mortgage interest cost makes up 3.5% of the basket weight of the Canadian Consumer Price Index (CPI), which is used to measure inflation. Since mortgage interest costs make up a significant portion of a household’s expenses, it’s something that borrowers should keep an eye on, both historical rates and forecasted mortgage rates in the future to see where they’re heading.
Historical mortgage rates are important to consider because they provide insight into how current market conditions may affect future borrowing costs. Did an economic slump cause rates to rise or fall? Is the current market environment conducive to getting a low mortgage rate? By examining past patterns in historical mortgage interest rates, potential future homeowners or current borrowers can make more informed decisions when it comes to buying a house or refinancing their mortgage.
Mortgage Rate History: Memorable Moments
The 1970s in Canada saw a period of stagflation, when inflation soared and economic growth collapsed. This was caused in large part due to oil prices, which jumped dramatically during the 1973 oil crisis, when the price of crude oil nearly tripled over the span of a few months. Inflation hit double digits across Canada, and unemployment rose sharply. While the United States plunged into a recession, Canada managed to avoid so.
During the 1970's, mortgage rates in Canada jumped back and forth between 12% and the decade-low of 10.25%, before ending off the decade by sharply rising above 13%.
The 1980’s were a memorable decade in Canadian mortgage rate history, as it was the time when inflation and mortgage rates peaked at an all-time high, and reached levels not seen since. The sky-high level of interest was in a bid to combat runaway inflation.
During the early 1980s, prime lending rates reached a staggering 22.75%, while other rates such as the 5-year fixed rate reached as high as 21.75%. This caused homeowners with mortgages to struggle with high interest payments.
Mortgage rates quickly fell from its peak. After 5-year fixed rates hit 21.75% between August 12, 1981 and October 7, 1981, rates then nearly halved, reaching 13.5% in January 1983 and 12.5% in November 1983. Mortgage rates would eventually hit their decade-low at 10% in 1987.
Inflation calmed back down in the 1990s, and with it went interest rates. 5-year fixed rates entered the 1990’s at 12% and would gradually decrease throughout the decade to 8.25% by the year 2000. For homeowners that have experienced double-digit mortgage rates since the 1970s, the era of cheaper borrowing that the 1990s ushered in was warmly welcomed by homeowners.
The 2000’s were marked by one of the most severe recessions to hit the global economy, and Canada was no exception, as a housing crash in the United States sent shockwaves across the border. Interest rates were lowered across the board, with prime rates being slashed from 6.5% at the start of the decade to 2.25% by the end of it. This caused mortgage rates to fall too, with the 5-year fixed rate declining from 8.55% in 2000 to 5.49% by 2010.
The 2010s saw an increase in economic growth and expansion in Canada, with the country coming out of the 2008-2009 recession relatively unscathed. Compared to previous decades, the 2010’s saw a period of relative stability for Canadian interest rates. The 5-year fixed mortgage rate stayed within a tight band of 2%, ranging between 4.64% to 6.25% throughout the decade.
The early 2020's were defined by the COVID-19 pandemic, which shuttered the global economy and forced central banks to slash interest rates. As Canada's economy entered a recession, policymakers scrambled to find ways to stimulate growth. Canadian prime rates fell to as low as 2.45%, while the 5-year fixed mortgage rate also fell.
As inflation picked up and became a larger concern, rate hikes led to mortgage rates soaring, reaching levels not seen in more than a decade.
Canadian Mortgage Rates: By The Decade
Average Posted 5-Year Fixed Mortgage Rates
| Decade | Average Mortgage Rate | Posted Mortgage Rate Range |
|---|---|---|
| 1970's | 11.20% | 10.25% - 13.25% |
| 1980's | 13.60% | 10.00% - 21.75% |
| 1990's | 9.10% | 6.60% - 13.25% |
| 2000's | 6.80% | 5.25% - 8.75% |
| 2010's | 5.10% | 4.64% - 6.25% |
| 2020's | 5.55% | 4.79% - 7.04% |
Historical Monthly Mortgage Payments
How did homeowners manage to make their mortgage payments with double-digit interest rates in the 1980’s? The answer is not as simple as it seems. To start, home prices in Canada were not nearly as high as they are today, as a multiple of the average household income, which meant that home prices were more affordable.
Let’s take a look at what an average monthly mortgage payment would have been through the decades, based on the average price of a home in Toronto as reported by the Toronto Regional Real Estate Board (TRREB), and using an amortization of 25 years and a 20% down payment. We’ll also adjust the values to account for inflation to today’s dollars.
Monthly Mortgage Payments: By The Decade
Inflation-Adjusted to 2020
| Year | Average Toronto Home Price | Average Mortgage Rate | Average Monthly Mortgage Payment | Average Monthly Mortgage Payment (2020 Dollars) |
|---|---|---|---|---|
| 1980 | $75,694 | 14.50% | $733 | $2,290 |
| 1985 | $109,094 | 12.20% | $913 | $1,988 |
| 1990 | $255,020 | 13.30% | $2,293 | $4,023 |
| 1995 | $203,028 | 9.20% | $1,366 | $2,137 |
| 2000 | $243,255 | 8.30% | $1,523 | $2,188 |
| 2005 | $335,907 | 6.00% | $1,719 | $2,206 |
| 2010 | $431,262 | 5.60% | $2,126 | $2,510 |
| 2015 | $622,116 | 4.70% | $2,810 | $3,030 |
| 2020 | $929,636 | 5.00% | $4,325 | $4,325 |
In 1980, the average monthly mortgage payment for an average home in Toronto would have been $733 per month. Adjusted for inflation to 2020 dollars, that would have been equivalent to $2,290 per month. In comparison, the same mortgage payment would have been $4,325 per month in 2020. That’s because Toronto home prices have soared from $75,694 in 1980 to $929,636 in 2020, while mortgage rates have dropped from 14.50% to 5.00%.
Another way to look at this is to compare historical mortgage payments with household income. Below, we’ll look at the median after-tax household income in Canada to see what percentage mortgage payments would take up of a household’s income.
Monthly Mortgage Payments vs. Monthly Household Income
1980 to 2020
| Year | Median After-Tax Household Income | Average Monthly Mortgage Payment | Mortgage Payment as % of Income |
|---|---|---|---|
| 1980 | $1,512 | $733 | 48% |
| 1985 | $1,994 | $913 | 46% |
| 1990 | $2,450 | $2,293 | 94% |
| 1995 | $2,568 | $1,366 | 53% |
| 2000 | $2,962 | $1,523 | 51% |
| 2005 | $3,543 | $1,719 | 49% |
| 2010 | $4,063 | $2,126 | 52% |
| 2015 | $4,652 | $2,810 | 60% |
| 2020 | $5,544 | $4,325 | 78% |
Income Data: Statistics Canada
While mortgage payments have soared, the median after-tax household income has remained relatively stagnant over the years. This means that while households are having to pay more for their homes, their income hasn’t risen comparatively.
When comparing mortgage payments as a percentage of a household’s monthly income, it would eat up 78% of a household’s monthly income in 2020. In comparison, mortgage payments took up just 48% of a household’s income in 1980.
Average Home Price as % of Income
1980 to 2020
| Year | Median After-Tax Household Income | Average Toronto Home Price | Home Price as % of Income |
|---|---|---|---|
| 1980 | $18,144 | $75,694 | 417% |
| 1985 | $23,928 | $109,094 | 456% |
| 1990 | $29,400 | $255,020 | 867% |
| 1995 | $30,816 | $203,028 | 659% |
| 2000 | $35,544 | $243,255 | 684% |
| 2005 | $42,516 | $335,907 | 790% |
| 2010 | $48,756 | $431,262 | 885% |
| 2015 | $55,824 | $622,116 | 1,114% |
| 2020 | $66,528 | $929,636 | 1,397% |
Income Data: Statistics Canada
When comparing the average home price as a percentage of the median after-tax household income, this ratio has risen from 417% in 1980 to 1,397% in 2020. This means that this ratio has tripled since 1980. As home prices have soared, households are having to stretch themselves further and further just to buy a home, even if mortgage rates have fallen during this same time period.