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.
Canada’s Rates After The October 2026 Rate Hike
Source: Bank of Canada, October 28, 2026
What Are Canada’s Mortgage Rates Like Today?
According to the Bank of Canada’s weekly figures, the big banks’ posted rate for a 5-year fixed mortgage is 6.19%, and the posted 3-year fixed rate is 6.05% (as of October 28, 2026). Most borrowers are offered a discounted rate below the posted rate. Variable rates are priced off each bank’s prime rate, which is now 4.70%.
Mortgage rates rose sharply over the past few years, then started to come down after the Bank of Canada slashed its overnight rate to 2.25% in October 2025.
Following this move, variable mortgage interest rates dipped by 0.25%. On October 28, 2026, the Bank raised its overnight rate to 2.50%, and the big banks raised their prime rate to 4.70% (as of October 29, 2026), so variable rates are now moving up again.
What The October 2026 Rate Hike Means For Your Mortgage
On October 28, 2026, the Bank of Canada raised its policy rate by 0.25 percentage points to 2.50%. Canada’s big banks followed by raising their prime rate from 4.45% to 4.70%, effective October 29, 2026. How this affects you depends on the type of mortgage you have:
- Variable rate with adjustable payments: Your rate is tied to your lender’s prime rate, so it went up by 0.25 points right away, and your payment went up with it. For example, on a $400,000 mortgage with 25 years left, a rate going from 3.55% to 3.80% adds about $54 a month, or roughly $650 a year.
- Variable rate with fixed payments: Your payment stays the same, but more of it now goes to interest and less to your principal, so it takes longer to pay off your mortgage. If rates keep rising, you could reach your trigger rate.
- Fixed rate: Your rate and payment won’t change until your term ends. Fixed rates follow Government of Canada bond yields more closely than the Bank of Canada’s rate, so the hike doesn’t change them directly.
- Renewing soon: Start comparing offers a few months before your renewal date, and budget for today’s rates rather than counting on rates dropping before then.
Mortgage Rate Future Forecast
The Bank of Canada cut its key interest rate to 2.25% in October 2025 and held it there through September 2026. On October 28, 2026, it raised the rate to 2.50%, as inflation had been running at about 3% since April 2026, higher and longer than the Bank expected.
Further changes will depend on how inflation behaves. The Bank's next rate announcement is on December 9, 2026. If the policy rate moves, variable mortgage rates will follow, and fixed rates may shift as bond yields react.
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:
Here’s how rates have moved most recently, followed by the three major periods when mortgage rates in Canada were high:
2025–2026
After raising its policy rate to 5.00% in July 2023 to fight inflation, the Bank of Canada started cutting in June 2024 as inflation cooled. It made nine cuts between June 2024 and October 2025, bringing its rate down to 2.25%, and the big banks’ prime rate fell from 7.20% to 4.45% along the way. Variable-rate borrowers saw the relief first, since their rates move with prime.
The Bank then held its rate at 2.25% at every decision from December 2025 to September 2026. But inflation picked up again, running at about 3% from April 2026, above the Bank’s 2% target. On October 28, 2026, the Bank raised its rate to 2.50%, its first increase since July 2023, and prime rose to 4.70%.
| Decision Date | Policy Rate | Prime Rate* | What Happened |
| October 28, 2026 | 2.50% | 4.70% | First increase since 2023 |
| October 29, 2025 | 2.25% | 4.45% | Ninth and last cut |
| January 29, 2025 | 3.00% | 5.20% | Sixth cut |
| June 5, 2024 | 4.75% | 6.95% | First cut |
| July 12, 2023 | 5.00% | 7.20% | Peak of the 2022–2023 increases |
2023 - 2024
This period resembled 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 29, 2026) | 6.19% | 6.05% | 4.70% |
| 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, variable rates went back to being slightly lower than fixed rates. That changed in December 2022, when the Bank of Canada’s rapid rate hikes pushed the 5-year variable rate above the 5-year fixed rate, and variable rates stayed higher through 2023. As the Bank cut its policy rate from June 2024 to October 2025, variable rates fell back below most fixed rates.
That’s still generally the case after the October 28, 2026 rate hike. Variable rates are priced off each lender’s prime rate, which is now 4.70% at the big banks, and most lenders’ 5-year variable rates remain below their 5-year fixed rates.
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 was expected to increase in 2025 as the Bank of Canada cut rates.
Does That Mean A Fixed Rate Is The Way To Go?
Not necessarily. Right now, variable rates are generally lower than fixed rates, which is the more typical pattern. But variable rates move with your lender’s prime rate, and the Bank of Canada raised its policy rate in October 2026, so a variable rate can keep changing during your term.
A fixed rate usually costs more up front, but it locks in your rate and mortgage payments for the whole term, which makes budgeting easier if rates rise.
On the other hand, if rates come down during your term, you’ll be locked into your higher fixed rate unless you break your mortgage and pay a penalty.
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, the big banks’ posted 5-year fixed rate is 6.19%, though the rate you’re actually offered can be much lower or higher depending on your financial and credit health. While rates are higher than they were in 2020 and 2021, they’re less than a third of their 1981 peak. 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 Bank of Canada’s interest rate right now?
What is the prime rate in Canada right now?
When is the next Bank of Canada rate announcement?
Will my mortgage payment go up after the Bank of Canada rate hike?
Does the Bank of Canada rate affect fixed mortgage rates?
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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