Mortgage Rate Curve

The chart below shows the average best rates for each mortgage term on RateSpy.com.

This graph provides a sense of how much of a rate premium you’ll pay for the security of a longer-term and/or fixed rate.

Key Takeaways from the last 30 days

• The most popular term in Canada is still (no surprise) the 5-year fixed. Those rates start at 2.35% to 2.49% for 30-45 day closes.
• The difference (spread) between 5-year fixed and variable rates has grown a bit wider. It’s now at 0.42 percentage points. That’s still much skinnier than the 1.25 percentage point long-term average.
• Despite that small spread, we’re still seeing a slight but growing interest in variable rates, based on the ratios of clicks from RateSpy.com visitors.
• Well-qualified homeowners willing to ride out potential rate hikes will find the best upfront savings in 1-year fixed rates, currently 1.79% to 1.99%+ on RateSpy.com.
• A few providers are still advertising 1.49% effective rates on one-year fixed terms. Those specials require you to take a line of credit of equal size to the mortgage. Most also require legal fees to set up the mortgage. Moreover, that 1.49% rate is an effective rate that includes cash back in lieu of an actual rate discount (i.e., the contract rate is actually higher than 1.49%).
• Most 10-year rates are in the 3.64% range and up, unless you live in Ontario or Quebec where brokers are selling them for as little as 3.25% on jumbo-sized mortgages.
• Fence sitters may find a happy medium in hybrid mortgages. Those products typically split the mortgage in two two parts; half fixed and half variable. The lowest rates on hybrids (a.k.a., combination mortgages) are currently 2.36-2.50%. A hybrid lets you participate in rock-bottom rates while still providing partial protection against rising interest costs.