Variable Mortgage Rates Canada: Best Rates & Fixed vs Variable

Variable mortgage rates in Canada have hit a tempting low—but the path forward is anything but settled. The best 5-year variable rate sits at 3.35%, a figure that makes fixed options look pricey by comparison, yet the Bank of Canada’s next move could flip that advantage entirely.

Lowest 5-year variable rate: 3.35% ·
TD 5-year variable special rate: 4.29% ·
BMO 3-year variable open: 7.750% ·
Ratehub lowest 5-year fixed: 4.04%

These rates anchor the entire fixed-versus-variable debate: the gap between the best available variable (3.35%) and the best fixed option (4.04%) stands at roughly 69 basis points as of April 2026.

Are variable mortgage rates going down in Canada?

Variable mortgage rates are unchanged, with the lowest 5-year rate at 3.35% (Ratehub.ca). The Bank of Canada held its overnight rate at 2.25% as of April 2026, keeping prime rate at 4.45%—a policy stance that has kept variable offerings relatively stable even as markets brace for what’s ahead.

Current trends

The current picture shows variable rates holding steady, with discounts ranging from 0.50% to 1.50% below the prime rate of 4.45% (Nesto.ca). Big bank posted rates tell a mixed story: RBC offers 5-year variable at 3.65%, BMO at 4.10%, and CIBC at 4.05%, while smaller lenders undercut them significantly—Meridian Credit Union at 3.54% and Equitable Bank at 3.60% (NerdWallet, Ratehub.ca).

Predictions for 3% rates

Whether Canadian variable rates will revisit the 3% floor remains uncertain. Nordest.ca projects five-year variable rates inching up to 3.65% by end-2026, while Mortgage Sandbox suggests variable rates may rise late 2026 without a recession—both forecasts carry medium confidence given the BoC’s current hold posture.

Find the best 5-year variable mortgage rates in Canada

Rate aggregation platforms offer the clearest view of what’s actually available. Ratehub.ca lists the best 5-year variable at 3.35% as of April 20, 2026, while competitor WOWA.ca quotes 3.30% for the same product on the same date—small differences that add up over a $300,000 mortgage.

Top rates from lenders

Five lenders stand out for borrowers prioritizing rate over brand familiarity. Ratehub.ca’s data shows the best 5-year variable at 3.35%, Nesto.ca at 3.40%, RBC at 3.65%, and Meridian Credit Union at 3.54%—all below the big bank average of 4.22% (Nesto.ca). TD’s special 5-year variable sits at 4.29%, noticeably higher than the market’s best offers.

The implication: even among the same product type, lender choice drives a 155-basis-point spread from the best available to the most expensive big-bank offering—a gap that compounds to tens of thousands of dollars over five years.

3-year and 1-year options

Shorter terms exist but carry distinct risk profiles. BMO’s 3-year variable open rate hits 7.750%—not a typo—making it a last-resort option for borrowers who need flexibility above all else. Most lenders emphasize the 5-year term as the sweet spot between rate competitiveness and regulatory simplicity.

Is a variable rate mortgage a good idea in Canada?

Variable rates offer lower initial costs and flexibility, but they come with a trade-off: your payments can climb without warning. The question isn’t whether variable beats fixed in theory—it’s whether your household budget can weather the uncertainty that theory ignores.

Pros and cons

When it suits you

Variable works best for borrowers with stable income, an emergency cushion, and a time horizon that lets them ride out rate fluctuations. It suits risk-tolerant homeowners who can absorb a payment jump without derailing their household finances—and who accept that the lender holds the upper hand if rates move against them.

Is it better to have a variable or fixed mortgage right now in Canada?

This is where the consensus fractures. Four experts weighing in for Canadian Mortgage Trends see volatility as the defining feature of the 2026 decision—60% of mortgages renew between 2025-2026, amplifying every basis-point difference. Some argue the BoC’s expected hold at 2.25% makes variable the clear winner; others point to fixed-rate bond market signals as a warning sign.

Expert opinions

The consensus splits along a simple fault line: those who trust the BoC’s stability signals lean variable, while those watching bond yields lean fixed. Nordest.ca notes that variable rates are stable while fixed may rise with bond yields. Mortgage Sandbox takes the more bearish view, arguing variable rates may rise late 2026 without a recession, potentially crossing above fixed rates.

Fixed vs variable comparison

The pattern is stark: fixed locks in certainty but costs more today; variable saves now but bets on the BoC staying put. With the majority of mortgages renewing in the next 18 months, this isn’t an academic debate—it’s a financial decision affecting hundreds of thousands of Canadian households.

Is the 4.75 interest rate high?

Context matters here. The qualifying rate sits at 5.25%, meaning borrowers must prove they can handle payments at that stress-test level. Against historical averages, 4.75% sits above the pre-pandemic norm but below the 2008 peak. Against today’s best variable offer of 3.35%, it looks expensive—but so does locking in before the BoC moves.

Context for 4.75%

The qualifying rate of 5.25% (Ratehub.ca) determines who gets approved, not what you pay. Your actual rate depends on the lender and product you choose—today’s best 5-year variable at 3.35% sits nearly 200 basis points below that threshold, giving qualified borrowers meaningful headroom.

Mortgage cost examples

A $300,000 mortgage at 4.75% over 25 years costs roughly $1,717 per month. At the best 5-year variable of 3.35%, that same loan drops to approximately $1,490 monthly—a difference of $227 per month, or $2,724 per year. Over five years, that’s over $13,600 in potential savings, assuming rates hold.

Variable mortgage rates are unchanged, with the lowest 5-year rate at 3.35%.

— Ratehub.ca (Rate comparison platform)

The Bank of Canada is expected to hold the policy rate near 2.25% in 2026.

— Nesto.ca (Mortgage forecaster)

You’ll save money compared to fixed rates throughout 2026, potentially reducing your mortgage costs by several thousand dollars.

— Nordest.ca (Mortgage analyst)

Two rate hikes will push the variable rate mortgage above the 5-year fixed rate.

— Mortgage Sandbox (Rate forecaster)