Your mortgage interest rate plays a key role in how much your mortgage costs you. But as high as rates are today, they’re nowhere near what homebuyers experienced back in the early 1980’s when rates neared 22%. While we’re a far cry from the historical lows we saw in the midst of the recent health crisis, it’s helpful to be familiar with historical mortgage rates in Canada to understand where we stand today compared to previous years.
What Are Canada’s Mortgage Rates Like Today?
Based on the top 5 big banks in Canada such as TD Bank, the posted rates for 5-year fixed-rate mortgages are within the 5.0% range, and 5-year variable-rate mortgage rates are around the 6.0% mark on average across these banks.
Mortgage rates have been on the rise over the past few years, but have recently started to show a downward trend. This is particularly true after the Bank of Canada slashed its overnight rate in July.
Following this move, variable mortgage interest rates dipped by 0.25%. Today, rates are relatively stable, as of mid-2024.
Mortgage Rate Future Forecast
Industry experts anticipate rates to steadily decrease over the second half of 2024 and into 2025. The Bank of Canada recently slashed its key interest rate to 4.5% after holding steady at 5.0% for years. Inflation also dipped to 2.7% in June from 2.9% the month before.
If inflation continues to cool, we could see more rate cuts from the central bank in the coming months. Should this happen, mortgage rates may follow suit.
Historical Mortgage Rates In Canada: What Do They Say?
The graph and cart below show how mortgage interest rates have behaved over the past 20 years:
There are three major periods where the historical mortgage rates were high in Canada:
2023 – 2024
The period we’re currently in eerily resembles that of 2007 and 2008 when the nation experienced a recession. In 2020 when the COVID pandemic hit, mortgage rates dropped to historic lows, hitting 2.45% by 2022. However, around that same time, inflation rose to historical highs, reaching 8.1% in June of 2022. This caused the BOC to raise its policy rate, which led to mortgage rates to increase.
| Year* | 5-Year Fixed Rate | 3-Year Fixed rate | Prime Rate |
| Current, as of October 2024 | 6.49% | 6.54% | 5.95% |
| 2024 | 7.04% | 7.14% | 7.2% |
| 2023 | 6.49% | 6.14% | 6.45% |
| 2022 | 4.79% | 3.49% | 2.45% |
| 2021 | 4.79% | 3.49% | 2.45% |
| 2020 | 5.19% | 3.94% | 3.95% |
| 2019 | 5.34% | 4.29% | 3.95% |
| 2018 | 4.99% | 3.74% | 3.2% |
| 2017 | 4.64% | 3.39% | 2.7% |
| 2016 | 4.64% | 3.39% | 2.7% |
| 2015 | 4.79% | 3.44% | 3.0% |
| 2014 | 5.34% | 3.95% | 3.0% |
| 2013 | 5.24% | 3.7% | 3.0% |
| 2012 | 5.29% | 4.05% | 3.0% |
| 2011 | 5.19% | 4.15% | 3.0% |
Source: BankofCanada.ca
2007 – 2008
During the 2007-2008 period, Canada and the rest of the world went through a severe recession. This time frame was marked particularly by the housing crash in the US that saw unprecedented foreclosures, as housing prices peaked just before 2006, and mortgage interest rates soared by 2008. Mortgage rates went as high as 7.55%
In Canada, the prime rate was slashed shortly after this period and continued on a steady downward trend over the next decade, bringing rates down with it. During this time, the housing market had been relatively stable.
| Year* | 5-Year Fixed Rate | 3-Year Fixed rate | Prime Rate |
| 2010 | 5.49% | 4.25% | 2.25% |
| 2009 | 6.75% | 6.25% | 3.5% |
| 2008 | 7.55% | 7.54% | 6.0% |
| 2007 | 6.45% | 6.4% | 6.0% |
| 2006 | 6.30% | 6.0% | 5.0% |
| 2005 | 6.05% | 5.6% | 4.25% |
| 2004 | 6.35% | 5.8% | 4.5% |
| 2003 | 6.7% | 6% | 4.5% |
| 2002 | 6.85% | 5.75% | 4% |
| 2001 | 7.95% | 7.8% | 7.5% |
| 2000 | 8.25% | 8.05% | 6.5% |
Source: BankofCanada.ca
1980 – 1982
During the 70’s, several issues caused inflation in Canada to get out of control. A global food shortage, a ban on OPEC oil and the Iranian Revolution resulted in food and energy prices inflating. Moreover, the Bank of Canada then didn’t have the same mandates or strategy to control inflation. This resulted in mortgage interest rates skyrocketing to as much as 21%.
| Year* | 5-Year Fixed Rate | 3-Year Fixed rate | Prime Rate |
| 1999 | 6.6% | 6.45% | 6.75% |
| 1998 | 7.05% | 7% | 6% |
| 1997 | 6.95% | 6.2% | 4.75% |
| 1996 | 8.45% | 8% | 7.5% |
| 1995 | 10.5% | 10.25% | 8% |
| 1994 | 7.75% | 6.9% | 5.5% |
| 1993 | 9.5% | 8.7% | 7.25% |
| 1992 | 9.9% | 9.5% | 8% |
| 1991 | 12.5% | 12.5% | 12.75% |
| 1990 | 12% | 12.% | 13.5% |
| 1989 | 12.25% | 12.25% | 12.25% |
| 1988 | 11.75% | 11.25% | 9.75% |
| 1987 | 11% | 10.75% | 9.75% |
| 1986 | 11.5% | 11% | 10% |
| 1985 | 12.5% | 12.25% | 11.25% |
| 1984 | 12.5% | 11.75% | 11% |
| 1983 | 14.75% | 14% | 12% |
| 1982 | 17.75% | 18% | 16.5% |
| 1981 | 16% | 15.75% | 18.25% |
| 1980 | 13.25% | 13.25% | 15% |
| 1979 | 11.25% | – | 11.5% |
Source: BankofCanada.ca
Historically, Are Fixed Or Variable Rates Cheaper?
Variable rates tend to be a bit lower than fixed rates because they’re considered less of a risk for lenders. That said, there have been times over the years when variable rates have been a little higher than fixed rates.
For instance, from June 2019 to February 2020, the 5-year fixed rate was lower than the 5-year variable rate.
Over the following two years, the trend returned to normal, as variable rates remained slightly lower than fixed rates. This trend remained until December 2022 when the 5-year variable rate once again overtook the 5-year fixed rate. Since then, the variable rate has continued to be higher than the fixed rate as of July 2024.
It should be noted, however, that variable rates tend to be riskier for borrowers because the rate and payment amount can change throughout the term. That means it can be more difficult to budget with a variable rate, as mortgage payments may be less predictable.
Why Do More Canadians Choose Fixed Rates Over Variable (Even Though They’re Cheaper?)
According to a report by Mortgage Professionals Canada, in 2023, the national average of fixed rate mortgage is 70%. While there may be a few reasons for this, perhaps the biggest reason is that homeowners know precisely what rate they’ll be paying over the entire loan term. This is a huge perk for those who have little appetite for risk and prefer to know exactly how much they have to spend at any given time.
Variable rate mortgages, on the other hand, make up 23% of mortgage holders in Canada. While the share of new variable-rate mortgages have shrunk in 2023, it’s expected to increase in 2024 as rate cuts continue.
Does That Mean A Fixed Rate Is The Way To Go?
Given the fact that today’s fixed rates are slightly lower than variable rates — which is rather atypical — it might make even more sense to go for a fixed-rate mortgage. You’ll have the benefit of stable mortgage payments and a lower interest rate.
However, keep in mind that things can change at any time. While variable rates may be a bit higher than fixed rates right now, the situation could flip at some point. And it likely will, given what we’ve historically seen with fixed versus variable rate trends.
If variable rates go down later, you may be left regretting your choice of a fixed rate, which you’ll be locked into for the duration of the loan term.
Ultimately, your decision to go with a fixed rate comes down to the predictability and stability of mortgage payments. It’s also a safeguard against any possible fluctuations in variable rates. No matter what happens to interest rates, your rate will remain unchanged, which is a good thing if rates increase.
How Much Was The Average Mortgage Payment In Canada: Historically?
To estimate the average monthly payments Canadians may have been paying, we’ve taken the average house prices and the 5-year fixed rate and calculated the monthly payments.
This is a simplified approach to help better understand how mortgage payments have changed historically.
Assuming a 10% down payment, a 5-year term and a 25-year amortization period, we’ve estimated the following:
| Year | Average Home Price* | 5-Year Fixed Rate | Estimated Monthly Payment |
| 2024 | $658,689 | 7.04% | $4,296 |
| 2020 | $505,285 | 5.19% | $2,778 |
| 2015 | $399,540 | 4.79% | $2,048.59 |
| 2010 | $328,587 | 5.49% | $1,803.38 |
| 2005 | $229,198 | 6.05% | $1,325.92 |
Source: BankofCanada.ca
Based on the chart above, you’ll notice that home prices have nearly tripled since 2005. While the 5-year fixed-rate mortgage rate is only slightly higher today compared to 2005, the estimated monthly mortgage payment is more than three times what it was 20 years ago.
Final Thoughts
Today’s fixed-rate mortgage rates are teetering at just over 5.0%, though they can be a little lower or much higher depending on your financial and credit health. While rates are relatively high compared to just a couple of years ago, they’re almost a quarter of where they were four decades earlier. Regardless, it’s important to apply for a mortgage when your finances and credit score are in order to get the lowest rate possible.
Historical Mortgage Rates FAQs
What is the highest mortgage rate in Canada’s history?
When were interest rates 18% in Canada?
What were the interest rates in 2008?
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