Find the best 2-year fixed mortgage rate

A 2-year mortgage rate refers to the term of your mortgage—not the amortization period. The term is how long your current mortgage rate is locked in, while the amortization period is the total time it will take to fully pay off your mortgage. At the end of the 2-year term, your mortgage effectively “resets,” meaning you’ll have to renew it at a then-available rate. A mortgage might, for example, have a 2-year term and a 25-year amortization period.

When the mortgage rate is 'fixed,' it stays the same throughout the term. If your 2-year fixed rate is 4%, then you will pay 4% interest each year for two years. By contrast, a variable mortgage rate fluctuates with the market interest rate (the “prime rate”).

It's worth noting that all borrowers, even those applying for a 2-year term, will need to meet the standards of approval for the 5-year mortgage rate. This is a standardized benchmark applied to reduce the risk for the lender and to give the borrower some breathing room.

While variable-rate mortgages are generally not available in 2-year terms, you can certainly get a 2-year fixed-rate mortgage. In fact, numerous lenders including the Big 5 Banks, credit unions and smaller banks all offer 2-year fixed-rate mortgage products. For a full range of 2-year fixed mortgage rates from a wide variety of providers, check out our rate table above. It’s updated throughout the day, ensuring that you’re always seeing the best and most current 2-year fixed mortgage rates on offer.

A 2-year fixed-rate mortgage is definitely worth it if you want the security of having fixed, unchanging mortgage payments for a relatively short period of time. Much of this has to do with your appetite for risk, and whether you are optimistic or pessimistic about the near-term future of mortgage rates. 

After 10 rate hikes from March 2022 to July 2023, the Bank of Canada cut its policy rate five times in 2024, bringing it down to 3.25%, reflecting signs that inflation is cooling. In fact, the latest Consumer Price Index shows inflation at 1.9%, which is just under the Bank of Canada’s 2% target. If inflation remains at or below this level, the Bank may continue to keep rates steady or potentially cut them further.

However, it’s important to remember that monetary policy can change quickly if new economic data suggests inflation is picking up again. If you’re risk-averse and want short-term stability, a 2-year fixed rate can offer a “safe zone.” You’ll protect yourself against sudden increases while also staying flexible if rates drop, as you’ll renew in two years, and can make a change to your mortgage then without penalty.

Ultimately, your decision should reflect your view on future rate movements and your personal financial goals. 

As with any mortgage term, at the end of your 2-year mortgage term, you can renew your mortgage with your existing lender, or switch lenders to get a more desirable mortgage product. Since you will already have had to qualify for your 2-year fixed-rate mortgage at the same standards you would have needed to qualify for a 5-year fixed-rate mortgage, provided you renew with your existing lender, you can do so without re-qualifying (as long as you’ve been making your mortgage payments regularly and are in good standing with your lender). Should you choose to switch to another lender and seek a 5-year fixed-rate mortgage with them, you will need to submit an entirely new mortgage application. 

If you feel like you need to convert your mortgage from a 2-year term to a 5-year term before the initial 2-year term is done, you risk breaking your mortgage and incurring substantial penalties. Unless you absolutely need to, it’s generally not advisable to take this step. However, if you must do so, you may be able to negotiate an agreement with your current lender, depending on the terms of your original mortgage contract.

When your 2-year fixed-rate term ends, your mortgage doesn’t disappear — it simply reaches its renewal point. At this stage, you usually have a few options:

1. Renew with your current lender: Negotiate a new rate and term length, whether another fixed-rate term, a variable rate, or something in between.
2. Switch to a new lender: Shop around to see if another lender can offer better terms or a lower rate. Switching lenders can often help you lock in a more competitive rate.
3. Pay off your mortgage (if possible): If you have the funds available or decide to sell your home, you could fully pay off the remaining balance.

It’s a good idea to start comparing rates and exploring your options a few months before your 2-year term is up.