If you’re planning to buy a home or refinance your current mortgage in Canada, finding the best mortgage rate is crucial.
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The interest rate you secure can have a significant impact on the total cost of your home, and even a small difference in rates can save you thousands of dollars over the life of the loan.
With mortgage rates changing frequently, it’s important to stay updated and compare different lenders to secure the most competitive rate.
In this article, we will guide you through the process of finding the best mortgage rates in Canada for 2025.
What Determines Mortgage Rates in Canada?
Before diving into specific mortgage rates, it’s essential to understand the factors that influence them.
Canadian mortgage rates are primarily determined by the Bank of Canada’s key interest rate, which acts as a benchmark for most lenders.
When the Bank of Canada raises or lowers its rate, mortgage rates usually follow suit.
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Other factors that can impact mortgage rates include inflation rates, the overall economic climate, and the financial institution’s business strategy.
In addition to the general economic conditions, your personal financial situation also plays a key role in the rate you’re offered.
Lenders will consider factors such as your credit score, income level, down payment size, and the type of mortgage you’re looking for (fixed vs. variable).
Generally, borrowers with better credit scores, stable incomes, and larger down payments are offered lower rates.
Fixed-Rate vs. Variable-Rate Mortgages
When choosing a mortgage, one of the first decisions you’ll need to make is whether to opt for a fixed-rate or a variable-rate mortgage.
Both have their pros and cons, and the best choice for you depends on your financial situation and risk tolerance.
A fixed-rate mortgage locks in your interest rate for a set period, usually ranging from 1 to 10 years.
The main benefit of a fixed-rate mortgage is predictability. Your monthly payments will remain the same throughout the term, so you can budget easily.
However, fixed-rate mortgages often come with higher initial rates compared to variable-rate mortgages, as they offer stability regardless of interest rate fluctuations.
On the other hand, a variable-rate mortgage has an interest rate that fluctuates with the market.
If interest rates go up, your monthly payments could increase. Conversely, if rates drop, your payments may decrease.
While variable rates tend to start lower than fixed rates, they come with more uncertainty.
If you’re comfortable with the possibility of interest rate changes and you expect rates to stay relatively low, a variable-rate mortgage could save you money in the long run.
Best Mortgage Rates in Canada for 2025
In 2025, mortgage rates in Canada are expected to remain relatively competitive, with slight fluctuations due to economic conditions.
To help you navigate the options, we’ve highlighted some of the best mortgage rates available from leading Canadian lenders:
Simplii Financial Simplii Financial, one of the largest online banks in Canada, offers competitive mortgage rates. Currently, they offer a 1.99% 5-year fixed-rate mortgage for new home purchases or refinances.
Simplii Financial is known for its low fees and straightforward process, making it an attractive option for borrowers who prefer to manage their mortgage online.
In addition to competitive rates, Simplii offers flexible prepayment options, allowing you to pay off your mortgage faster without penalties.
TD Canada Trust TD Canada Trust is one of Canada’s largest banks, and they consistently offer competitive mortgage rates.
For a 5-year fixed-rate mortgage, TD offers rates starting from 2.24% for those with excellent credit scores.
TD also provides personalised mortgage advice, a range of repayment options, and specialised mortgage plans, such as their “First-Time Homebuyer” program.
They offer a wide variety of mortgage products, including fixed and variable-rate options, and provide valuable tools to help you manage your mortgage over time.
RBC Royal Bank RBC is another leading bank in Canada that offers competitive mortgage rates. For 2025, they offer 1.99% for a 5-year fixed-rate mortgage, which is one of the best rates available.
RBC also provides a range of mortgage options, including home equity lines of credit (HELOCs) and specialised mortgages for first-time buyers.
In addition, RBC’s online mortgage tools allow you to calculate your payments, compare different mortgage products, and even pre-qualify for a mortgage.
BMO Bank of Montreal BMO offers some of the most competitive mortgage rates in the market.
Their 5-year fixed-rate mortgage currently starts at 2.14%, and they also have low rates for variable-rate mortgages.
With BMO, you’ll have access to a variety of mortgage products, including fixed and variable-rate mortgages, as well as specialised options like the BMO Homeowner ReadiLine (a combination of a mortgage and line of credit).
They also offer flexible prepayment options, which can help you pay off your mortgage faster.
Scotiabank Scotiabank offers a variety of mortgage products at competitive rates.
Their 5-year fixed-rate mortgage starts at 2.20%, making them a strong contender in the Canadian mortgage market for 2025. Scotiabank offers flexible terms, allowing you to choose the mortgage that best fits your needs.
They also offer specialised programs for first-time homebuyers and those looking to refinance, along with tools like a mortgage calculator and rate tracker to help you find the best deal.
National Bank of Canada National Bank offers a highly competitive 5-year fixed-rate mortgage starting at 2.09%.
Known for their strong customer service, National Bank provides various mortgage options, including flexible terms and conditions.
They also offer specialised services like personalised mortgage planning, which is ideal for those looking to customise their mortgage to their financial needs.
Additional Tips for Securing the Best Mortgage Rates
While comparing rates from various lenders is an important first step, there are additional strategies you can use to secure the best possible rate:
- Improve your credit score: Lenders typically offer better rates to borrowers with higher credit scores. If your credit score isn’t great, consider taking steps to improve it before applying for a mortgage.
- Make a larger down payment: The more money you can put down upfront, the less risk the lender takes on. A larger down payment may result in a lower interest rate and can help you avoid mortgage insurance costs.
- Consider a mortgage broker: A mortgage broker can help you shop around and find the best mortgage rate for your situation. They have access to a wide range of lenders and can assist with the paperwork and negotiations.
- Lock in a rate: If you’re concerned that rates might rise before you secure a mortgage, consider locking in your rate. Many lenders allow you to lock in a rate for a set period (typically 60 to 120 days).
Conclusion
In 2025, Canadian homeowners and potential buyers have access to some of the best mortgage rates in recent years.
Whether you’re opting for a fixed or variable-rate mortgage, it’s essential to compare rates, understand the terms, and consider how your financial situation can affect your mortgage rate.
Leading Canadian banks like Simplii Financial, TD, RBC, BMO, Scotiabank, and National Bank all offer competitive rates and tailored mortgage options that can help you secure a great deal.
To find the best mortgage rate, take the time to shop around and assess your options.
A small difference in the interest rate can make a big difference in the long term, so it’s worth the effort to compare rates, speak with mortgage experts, and choose the mortgage that fits your budget and financial goals.
