Best Mortgage Rates
If payment certainty is your goal, a fixed mortgage rate may fit you like a glove. Unlike floating rates, fixed rates don’t change for the entirety of your term. That means, your payment stays the same until maturity.
Best Fixed Mortgage Rates
As with any mortgage, the best fixed rate depends on the flexibility you require and the restrictions you can live with. The lowest rates often have shorter rate holds (like 30 days), high penalties for early termination and/or prohibitions against changing lenders before maturity.
Fixed mortgages have terms ranging from six months to twenty-five years. In most cases, however, terms longer than five years are simply not economical due to their rate premiums and their high break-even point compared to shorter terms. (A breakeven point is the rate increase required for a longer term to save you more money than a shorter term, after factoring in the interest rate you’ll receive when renewing the shorter term.)
At any given time, the best value could be affected by the rate promotions available in the marketplace. Don’t get wed to one term unless minimizing rate risk is your top priority, in which case the popular 5-year fixed might be your only practical choice.
Last but not least, remember that shorter fixed-rate mortgages require that you qualify at a higher interest rate. In other words, if the term is less than five years most lenders require that you prove you can afford payments based on the Bank of Canada posted rate. That’s to protect you in case rates jump before your renewal date.
One quick note: Our mission is to always list the lowest fixed rates in Canada. If you happen to find one lower, please email us. Rate tips — from informants like you — help thousands of Canadian families save money every year at RateSpy.com.