Variable-rate mortgages may not provide better interest rates than a typical five-year fixed-rate mortgage this year.Cole Burston/The Globe and Mail
Expectations of multiple rate cuts by the Bank of Canada this year are thinning – along with expectations that the central bank will cut rates at all. That could make variable-rate mortgages a little less attractive for homeowners.
In recent months, market predictions have gone from three cuts, for a total drop of 75 basis points, to just one cut of 25 basis points for the remainder of 2025.
Earlier this week, Canada and the U.S. committed to reaching a trade agreement that could put an end to tariffs between the two countries. If a deal is reached, economists say, it could lead the BoC to hold off on cutting rates entirely this year, since the need to cut rates was largely based on propping up the economy during a trade war.
All of this means there is a chance that variable-rate mortgages won’t provide better interest rates than a traditional, five-year fixed-rate mortgage this year.
Variable-rate mortgages are generally just one rate cut away from being a few basis points cheaper than five-year fixed-rate mortgages, and consumers will have to consider whether that discount is worth the risk that inevitably comes with a variable-rate mortgage.
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 market close on June 19.
