Compare the best Big 5 Bank mortgage rates

Getting a mortgage is a major financial commitment and can make big changes to your lifestyle. So, taking the time to choose the right mortgage is really important. For most Canadians, the Big 5 Banks are what they will think of first when they consider taking the mortgage plunge, but the big banks are not your only choice.

Below are some essential details about getting a mortgage from one of the Big 5 Banks, or from any other kind of lender.

Canadian mortgage market update: November 2024

The normally busy summer housing market in Canada was noticeably quiet, as buyers stayed on the sidelines and awaited lower mortgage rates. With the Bank of Canada having carried out a fourth quarter-point policy rate cut in October, market activity has started to pick up. 

Variable mortgage rates dropped by roughly the same amount as the policy rate, and, with markets anticipating another rate cut in December, further downward pressure on rates is expected. 

Fixed mortgage rates are tied to the bond market rather than directly to the Bank of Canada and its rate decisions, and in response to the Bank of Canada’s October 23 rate cut, bond yields have dropped. This in turn has allowed some lenders to reduce their fixed mortgage rates. 

Still, though, from a historical perspective, both variable and fixed mortgage rates remain elevated. Anyone shopping for a mortgage rate in Canada right now should be aware of the economic factors below.

• Real estate update: On November 15, 2024, the Canadian Real Estate Association (CREA) reported a significant surge in activity in the housing market for October. A total of 44,041 homes were sold across Canada, marking a 30% increase compared to October 2023 and a 7.7% rise from September — the highest sales activity since April 2022. Strong sales were concentrated in major markets, with the Greater Toronto Area experiencing a 43.3% increase and British Columbia’s Lower Mainland up 32.4%. This surge is largely attributed to the Bank of Canada's four interest rate cuts since June. The national average home price rose 6% year-over-year to $696,166. Market conditions are currently balanced but show signs of tightening. The sales-to-new-listings ratio (SNLR) jumped to 58% in October from 52% in September, exceeding the long-term average of 55%. CREA considers an SNLR between 45% and 65% indicative of a balanced market, but the upward trend suggests increased buyer competition and a potential shift toward a seller’s market if supply doesn't keep pace. According to CREA Chair James Mabey, "October’s strong sales numbers suggest buyers have been active since rates began to fall, waiting for the right properties to come to market. The extent to which that continues will depend on new supply levels between now and spring."
  

  Read more: National home sales rise 30% in October

• CPI update: On October 15, 2024, Statistics Canada released the September Consumer Price Index (CPI) report, revealing inflation slowed to 1.6%, down from 2% in August and below the forecasted 1.8%. This marks the lowest increase since early 2021, bringing inflation well under the Bank of Canada’s 2% target — a level considered sustainable for the economy. A major factor behind the decline was a -10.7% drop in gas prices. Mortgage interest costs also continued to decrease, falling to 16.7% in September from 18.8% in August. Meanwhile, Canadians are still feeling the strain from high rent prices and groceries, which have continued to rise, putting pressure on household budgets. Economists are now predicting that the Bank of Canada may cut rates by 50 basis points to stimulate the slowing economy, which would lower the overnight lending rate to 3.75%. Such a move would provide relief for borrowers, particularly those with variable-rate mortgages, but reduce returns on savings products tied to prime rates.
  

  Also read: Canadian CPI falls to 1.6% in September, increasing chance of half-point rate cut

November 2024 Fed rate cut announcement

On November 7, 2024, the US Federal Reserve decided to lower its benchmark interest rate by a quarter-point. This is the second rate cut in a row, following a half-point decrease in September. The Fed is working to manage inflation, which has decreased from 9.1% in June 2022 to 2.4% in September 2024.

The outlook for future rate cuts is now uncertain, especially with the recent US Federal Election. President Elect Donald Trump’s proposed economic policies could lead to higher inflation, which makes it unclear how the Fed will respond. Fed Chair Jerome Powell mentioned that future decisions will depend on the economy's performance.

The implications of this rate cut extend to Canadian markets as well. Rising bond yields in the US, particularly for the 10-year Treasury note, suggest that borrowing costs will increase. As a result, Canada’s five-year bond yield has also gone above 3%, indicating that fixed mortgage rates could rise. This may lead to higher costs for homeowners and those looking to purchase homes in Canada.

As both the US and Canadian economies face potential changes ahead, borrowers should be prepared for fluctuating interest rates in the coming months. 

Also read: US Federal Reserve cuts rate by 0.25% in November announcement

Canadian mortgage reform update

On September 16, 2024, the federal government announced sweeping changes to mortgage qualification rules for first-time home buyers, as well as those purchasing newly-constructed homes.

As of December 15, 2024:

• 30-year amortizations will be available for all first-time home buyers, regardless of whether they have an insured mortgage. These extended amortizations are also available for any purchase of new construction.
  
  
• The maximum purchase price for an insured mortgage (where less than 20% down is paid) will be increased to $1.5 million, from the current $1 million.
  

These are some of the most impactful mortgage reforms announced since 2012, and are anticipated to increase first-time home buyers’ affordability and access to the housing market. 

Learn more about these new mortgage rule changes on the Ratehub.ca blog

October 2024 affordability update 

According to Ratehub.ca’s latest, in August 2024, Canadian home buyers saw improved affordability in many cities due to falling mortgage rates and softening home prices. This positive trend was largely driven by the Bank of Canada’s recent rate cuts, which brought the average five-year fixed mortgage rate down to 5.16% while the mortgage stress test rate eased to 7.16%.

These changes made buying a home more attainable for Canadians. For example, in Toronto, the required income to purchase a home fell significantly as prices dropped by $15,100. The effects were felt nationwide, with cities like Vancouver and Victoria also experiencing similar improvements.

Looking ahead, future rate cuts could further improve affordability, and new mortgage qualification rules will offer longer amortization periods and higher insured mortgage purchase caps. These updates are expected to enhance affordability, especially in Canada’s higher-priced housing markets.

Read more: Dropping mortgage rates improved home affordability in August

Posted rates vs. best rates

When comparing bank mortgage rates, it’s important to know that these rates represent the banks' posted mortgage rates. The posted rate is simply the rate that the bank is advertising in public. However, banks are often able to offer even lower rates in order to secure a borrower's business. You may be able to access these discounted rates through negotiation, or by reaching out to a representative mortgage broker. Some banks offer rates several percentage points below what is posted, so it's worth taking the time to see if you can get a better offer.

Bank rates vs. broker rates

As you may have noticed, bank mortgage rates are almost always higher than those of mortgage brokers. That is because mortgage brokers have access to rates from multiple banks and credit unions, as well as insurance and trust companies. That means they can shop around for you. Brokers also receive bulk discounts from lenders based on the high volume of their business that they can pass along to you.

As a result, it’s unlikely that a bank will post a lower rate than a mortgage broker. However, if you present the lowest market rate to your bank as part of the negotiation process, they may offer to match it. That said, we don’t recommend pitting the banks and brokers against each other to compete for your business. What we do recommend is comparing broker mortgage rates and bank mortgage rates alongside each other, and deciding which offer is best for you.

Comparing mortgage rates with Ratehub.ca

Whether you're considering using a bank or broker, a variable or fixed mortgage rate, or a one to a 10-year term, we can help. Our tools find the best mortgage rates for every category and type of lender, personalized to you. Our goal at Ratehub.ca is to give Canadians the best mortgage experience from online search to close. This means offering Canadians the mortgage tools, information and articles to educate themselves, allowing them to get personalized rate quotes from multiple lenders to compare rates instantly and providing them with the best online application and offline customer service to close their mortgage all in one place.