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A hybrid mortgage is designed to diversify a borrower’s rate risk.

It has:

  • both a fixed and variable portion (e.g. 60% fixed rate and 40% variable rate)
  • a long term and a short term (e.g., a 5-year fixed and a 1-year fixed).

A hybrid enables you to enjoy the stability of a fixed rate, while taking advantage of potential rate savings on the variable portion.

These are Canada’s best hybrid mortgage rates.

Keep in mind:

  • Hybrids are available at only a minority of lenders
  • Most lenders do not offer hybrids if you have less than 20% equity
  • Hybrids are usually collateral charge mortgages and therefore best suited to mortgages over $200,000+. That’s due to the additional fixed costs of changing lenders at maturity. (Moving a collateral charge mortgage to a new lender can cost you roughly $250 to $1,000, depending on whether the new lender pays any of your fees.)

That said, if a hybrid ends up saving you interest versus a fixed or variable rate alone, the “switching” costs are usually inconsequential.

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