Leah Zlatkin, a mortgage broker in the Toronto area, says her clients seem to be more inclined to make short-term decisions about moving than ever before.Christinne Muschi/The Canadian Press
Shorter-term mortgages are emerging as the cheapest available option for fixed rates, as rising bond yields put more pressure on five-year fixed mortgages.
The latest data from Ratehub.ca showed that the lowest advertised two-year and three-year fixed mortgages were available at the 3.8 per cent level, while the cheapest advertised five-year fixed rate was at 4.09 per cent.
Five-year fixed mortgages have been particularly affected by the Canada five-year bond yield, which lenders take into account when setting mortgage rates. The yield reached 3.35 per cent on Thursday, matching a previous high in May.
Meanwhile, a Rates.ca report from earlier this week showed that 82 per cent of people who renewed mortgages since January, 2025, did so at a higher rate.
Forty-five per cent of those households are now spending half or more of their monthly budget on mortgage payments, highlighting that the cheapest rate may be the most important consideration for some shoppers.
A five-year fixed term typically provides the most stability for homeowners and is often recommended for first-time buyers who could benefit from a longer horizon to pay off their mortgage balance. However, a two- or three-year mortgage provides flexibility if owners believe there’s a possibility they’ll sell their home.
Homeowners are managing higher mortgage payments despite financial strain, survey shows
Leah Zlatkin, a mortgage broker in the Toronto area, said she often recommends three-year mortgages because her clients seemed to be more inclined to make short-term decisions about moving than ever before. She said life circumstances should be among the top considerations when picking term lengths.
Variable rate mortgages currently offer the cheapest rates, but some brokers say that homeowners have been largely avoiding variable mortgages because of the current uncertain economic environment, and the fact that it would only take a couple rate hikes from the Bank of Canada for a variable rate to be more expensive than a fixed one.
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Mortgage rates are sourced by Ratehub.ca. For a comprehensive list of today’s mortgage rates for each term/type, visit ratehub.ca/best-mortgage-rates.
Ratehub.ca is a mortgage-rate comparison marketplace and mortgage brokerage. It helps millions of Canadians compare and obtain the best mortgage rates, credit cards, insurance, deposits and loan products.
Rates shown are the lowest available for each term/type and category (insured versus uninsured) as of Thursday afternoon.
