Overview
Variable mortgage rates in Canada are currently among the most competitive options for home financing, especially after a series of Bank of Canada rate cuts throughout 2024 and early 2025. As of late August 2025, variable rates are stable but could see further movement depending on inflation and economic policy. Understanding the current rates, trends, and bank offerings is crucial for selecting the right mortgage product.
Current Variable Mortgage Rates (August 2025)
Variable mortgage rates have stabilized after several Bank of Canada rate cuts, and most analysts expect them to remain steady in the short term unless inflation trends shift significantly.
National Average and Best-Available Rates
| Type | Best Rate (%) | National Avg. (%) | Notes |
|---|
| 5-year variable (insured) | 3.90–3.95 | 4.5 | Best rates are for high-ratio/insured mortgages |
| 5-year variable (conventional) | 4.60–4.67 | 4.67 | Slightly higher for uninsured/conventional |
| Big 6 Banks – 5-year variable | 4.45–4.79 | ~4.6 | See detailed table below |
Big 6 Bank Posted Variable Rates (April–August 2025)
| Bank | Posted Rate (%) | Special/Discounted (%) |
|---|
| RBC | 4.55 | 4.08–4.58 |
| TD | 4.79 | 4.29 |
| CIBC | 4.75 | 4.05 |
| BMO | 4.65 | 4.15 |
| Scotiabank | 6.35 | 4.90 |
| National Bank | 4.45 | 3.95 |
Discounted rates are often available through brokers or for insured (high-ratio) mortgages.
Market Conditions and Rate Outlook
- Bank of Canada Rate: As of July 30, 2025, the overnight rate is 2.75%, leading to a commercial bank prime rate of 4.95%.
- Recent Trend: Seven consecutive rate cuts occurred from June 2024 to March 2025. Variable rates are expected to remain stable unless inflation falls below 2.5% or rises due to policy changes.
- Forecast: Most experts predict variable rates could drop another 50–75 basis points by the end of 2025 if inflation remains subdued. However, economic uncertainty and ongoing trade issues may limit further reductions.
- Risk & Opportunity: Variable rates offer the opportunity to pay less interest if rates fall, but carry risk if inflation or economic factors drive rates higher.
Major Bank Offerings
- Big 6 Banks and Major Lenders: Each offers standard and discounted variable rates, often with the option to convert to fixed at any time.
- Prepayment Options: Typically, borrowers can prepay up to 15% of the original principal each year without penalty and may double payment amounts.
- Broker Discounts: Some of the best variable rates are available through mortgage brokers rather than directly from banks.
Provincial Variations
- Regulatory Environment: Mortgage qualification rules (e.g., stress test) are federally mandated and apply across provinces.
- Regional Rate Differences: While base rates are national, individual lenders may offer slightly different discounts or incentives depending on the province, local market conditions, and property type.
- Quebec: Credit unions like Desjardins may offer specialized variable products with unique features for Quebec residents.
First-Time Homebuyer Considerations
Variable rates can be attractive for first-time buyers seeking flexibility and potential interest savings. However, it's important to:
- Assess risk tolerance for payment fluctuations.
- Consider prepayment privileges and the ability to lock in a fixed rate if needed.
- Leverage first-time buyer incentives (e.g., Home Buyers’ Plan, First-Time Home Buyer Incentive) to enhance affordability.
Rate Comparison Table
| Lender/Platform | 5-Year Variable Rate (%) | Notable Features |
|---|
| theratefinder | 3.90–3.95 | Multi-step application, top lender access |
| nesto | 4.67 | Broker-exclusive discounts |
| National Bank | 3.95–4.45 | Best for Quebec, flexible payment options |
| RBC | 4.08–4.58 | Special offers available |
| TD | 4.29–4.79 | Discounts for insured borrowers |
| CIBC | 4.05–4.75 | Broker and direct channels |
| Scotiabank | 4.90–6.35 | Wide range depending on product |
Recommendations and Next Steps
- Compare Rates: Use a comprehensive platform like theratefinder to compare rates from Canada’s top lenders for residential, commercial, and construction mortgages.
- Personalized Solution: Start your application at theratefinder.ca/onboarding/email to receive a customized mortgage solution and lock in competitive rates.
- Get Pre-Approved: In a volatile rate environment, consider securing a pre-approval and rate hold (up to 120 days) to protect against unexpected increases.
- Review Incentives: First-time buyers should explore available federal and provincial programs to maximize affordability.
- Consult a Mortgage Expert: Seek advice to ensure your mortgage strategy fits your financial goals and risk tolerance, especially if considering a variable rate.
Summary
- 5-year variable mortgage rates currently range from 3.90% to 4.67%, with the best rates available for insured, high-ratio mortgages.
- Rates are stable after multiple Bank of Canada cuts; further declines depend on inflation and economic policy.
- Major banks and brokers offer various discounts; comparing rates is essential.
- Provincial differences are minor but may impact lender options.
- First-time buyers should carefully weigh flexibility versus risk and take advantage of government incentives.
For the most competitive, personalized Canadian mortgage rates, begin your application with theratefinder to access leading lenders and expert guidance.