Canada Mortgage Rate News

WOWA Trusted and Transparent
Updated May 5th, 2021

Best 5-Year Mortgage Rates from Canadian Lenders

Most up to date mortgage rates from lenders across canada, along with their historic 6-month trends.
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nuborrow

5-YEAR FIXED
1.69%
- No Change
5-YEAR VARIABLE
1.55%
- No Change
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Alterna

5-YEAR FIXED
1.84%
- No Change
5-YEAR VARIABLE
1.65%
- No Change
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motusbank

5-YEAR FIXED
1.89%
- No Change
5-YEAR VARIABLE
1.70%
- No Change
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ATB Financial

5-YEAR FIXED
1.99%
- No Change
5-YEAR VARIABLE
1.65%
- No Change
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Laurentian Bank

5-YEAR FIXED
1.99%
- No Change
5-YEAR VARIABLE
1.55%
- No Change
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Canada Life

5-YEAR FIXED
2.02%
- No Change
5-YEAR VARIABLE
1.48%
- No Change
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Equitable Bank

5-YEAR FIXED
2.04%
- No Change
5-YEAR VARIABLE
1.45%
- No Change
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DUCA

5-YEAR FIXED
2.04%
- No Change
5-YEAR VARIABLE
2.95%
- No Change

MORTGAGE RATE FORECAST 2021

5-year fixed mortgage rates are expected to rise by at least 20bp by the end of 2021. Our base case predicts a rise of 30bp corresponding to a mild increase in the Government of Canada 5-year bond yield. Economic conditions are expected to improve as vaccination programs accelerate, allowing the Bank of Canada to tighten its monetary policy and allow yields to rise. In addition, inflation expectations for the next few years are rising as record-breaking household savings levels will be unlocked after lockdowns loosen. If global bond yields continue to rise or the BoC pre-emptively ends their quantitative easing programs, we expect a rise of up to 65bp. Other fixed mortgage terms are also likely to see corresponding increases.

We do not expect variable mortgage rates to change significantly by the end of 2021. Variable mortgage rates are directly related to the Prime Rate, which in turn rely on the Bank of Canada target overnight rate. The BoC has signalled for no increases to the rate until at least 2023. Retail mortgage rates may still fluctuate, however, depending on promotions offered by individual mortgage lenders.

5-YEAR BOND YIELD FORECAST 2021

HOUSING MARKET NEWS March 2021

British Columbia HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$945,936
Mar 2020 AVERAGE HOME PRICE:$787,032
20.19%INCREASE YoY
Learn More With Our Canada Housing Market Report

Alberta HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$443,000
Mar 2020 AVERAGE HOME PRICE:$381,160
16.22%INCREASE YoY
Learn More With Our Canada Housing Market Report

Saskatchewan HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$278,400
Mar 2020 AVERAGE HOME PRICE:$255,800
8.84%INCREASE YoY
Learn More With Our Canada Housing Market Report

Manitoba HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$338,458
Mar 2020 AVERAGE HOME PRICE:$301,369
12.31%INCREASE YoY
Learn More With Our Canada Housing Market Report

Ontario HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$890,035
Mar 2020 AVERAGE HOME PRICE:$685,430
29.85%INCREASE YoY
Learn More With Our Canada Housing Market Report

Quebec HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$435,516
Mar 2020 AVERAGE HOME PRICE:$340,418
27.94%INCREASE YoY
Learn More With Our Canada Housing Market Report

New Brunswick HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$253,870
Mar 2020 AVERAGE HOME PRICE:$192,348
31.98%INCREASE YoY
Learn More With Our Canada Housing Market Report

Nova Scotia HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$362,988
Mar 2020 AVERAGE HOME PRICE:$286,397
26.74%INCREASE YoY
Learn More With Our Canada Housing Market Report

Prince Edward Island HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$330,121
Mar 2020 AVERAGE HOME PRICE:$270,905
21.86%INCREASE YoY
Learn More With Our Canada Housing Market Report

Newfoundland and Labrador HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$282,600
Mar 2020 AVERAGE HOME PRICE:$264,500
6.84%INCREASE YoY
Learn More With Our Canada Housing Market Report

Yukon HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$497,187
Mar 2020 AVERAGE HOME PRICE:$409,787
21.33%INCREASE YoY
Learn More With Our Canada Housing Market Report

Northwest Territories HOUSING MARKET

CURRENT AVERAGE HOME PRICE:$438,580
Mar 2020 AVERAGE HOME PRICE:$450,249
-2.59%DECREASE YoY
Learn More With Our Canada Housing Market Report

LATEST MORTGAGE RATE NEWS

Certainty Amid Turmoil: Mortgage Rates in 2020

Looking at the real estate industry, 2020 was a tumultuous year with startling developments in key indicators, such as the number of new listings, sales, and housing prices. What wasn’t so surprising was the movement of mortgage rates after April 2020, brought on by policy decisions by the Bank of Canada but also movements in the bond market.

Fear about a mysterious coronavirus started to spook markets towards the end of January, with investors rushing towards the safety of government bonds and away from risky securities such as equities. This large influx towards government bonds put immense pressure on bond yields as bond prices soared). For example, the price of a 30-Year Government of Canada bond auctioned on November 14, 2019 had a price of $109.389. An auction for a 30-Year bond on August 12, 2020 had a price of $123.089.

However, what matters to mortgage rates is the 5-Year Government of Canada bond yield, which quickly fell from 1.6% at the start of the year to a low of almost 0.31% during the summer. This represents a decline of 80%, largely brought on by bond buying programs from the Bank of Canada. In an effort to stimulate the economy, the Bank of Canada purchased at least $5 billion of government bonds throughout 2020, which helped to lower interest rates. The intention of low interest rates is that consumers and businesses will increase their borrowing and spending. This was certainly seen as low mortgage rates resulted in an upsurge in housing prices.

Fixed-rate mortgages are determined by government bond yields. With bond yields plummeting 80% in 2020, mortgage rates in Canada in turn plunged to their lowest rates in history. Some of Canada’s major banks offered five-year fixed mortgages for under 2%, while some mortgage lenders featured very low mortgage rates as low as 1.3%. Spurred on by low mortgage rates, housing activity rebounded after a slump during the spring.

At the same time, action by the Bank of Canada led to a decline in variable-rate mortgages, which are guided by the Prime Rate. In previous years, the Bank of Canada followed the U.S. Federal Reserve by steadily increasing their policy rate from 2017 until 2019, with the Bank of Canada maintaining a slight discount compared to theFed funds rate.

This changed in July 2019 when the Fed started to decrease their policy rate, yet the Bank of Canada decided to maintain their overnight rate. A tipping point was reached when the Fed funds rate dropped below the Bank of Canada's overnight rate in November 2019. Pressure started to grow for the Bank of Canada to cut their policy rate, especially as the economy faced an already existing slowdown heading into 2020.

It wasn’t until March that the Bank of Canada started cutting rates, but when they did, it was intensive and decisive. In quick succession, three rate cuts dropped the policy interest rate from 1.75% to 0.25% in March 2020, a record low. This finally brought relief to variable-rate mortgages, which are dependent on the prime rate, rather than government bond yields.

The Bank of Canada also introduced an asset purchasing program focused on buying up Government of Canada bonds at a rate of $5 billion per week. Starting in March, the program racked up $156 billion in bonds by the end of October. These purchases pushed up bond prices, which results in lower bond yields. In turn, lower bond yields meant lower mortgage rates.

Amid a year of uncertainty, what remained incredibly certain was the direction of interest rates. Although slowing its quantitative easing program to $4 billion per week, the Bank of Canada continued to make clear that they will maintain the current policy interest rate until a 2% inflation target is achieved, which is not forecasted until 2023. Mortgage rates fell to levels not seen before in 2020, and remained that way through to the end of the year. Although the direction of future rates are up in the air past 2023, mortgage rates tumbled in 2020 and can be expected to remain low in the near future.