Canadian Mortgage Rates Mixed as 3-Year Terms Ease and Variable Nudges Higher

Toronto | 11 Nov 2025 — 07:00 EST
Canada’s conventional mortgage market began the week with a mixed tone. latest rate tracker for Monday, 10 November 2025, the average 3-year fixed rate across the country has slipped to 4.71 %, down 35 basis points from a month ago. The 5-year fixed rate held nearly flat at 4.69 %, while the 5-year variable / adjustable rate inched up 2 basis points to 4.27 %.

The combination points to a market still adjusting to the Bank of Canada’s October 29 rate cut — but also one that’s approaching equilibrium after months of sharp volatility.

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Quick Facts:

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What Changed This Week

The decline in 3-year fixed rates is the clearest sign that competition among lenders is returning.

• Shorter fixed terms often react faster to market expectations of future rate cuts, and the BoC’s October decision has softened funding costs for these maturities.
• Lenders have room to narrow spreads without dramatically impacting margins, leading to small but meaningful reductions in the 3-year bucket.

By contrast, 5-year fixed rates appear to have hit a plateau near 4.7 %. Bond yields remain in the 3.2–3.4 % range, which limits further cuts unless inflation data weakens again.

Variable and adjustable mortgages ticked higher, suggesting lenders are pricing in a modest risk premium or slower-than-expected policy follow-through from the central bank.

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Borrower Implications

1. For New Buyers:
   The easing in 3-year fixed rates slightly improves affordability calculations, especially for borrowers planning to refinance within a shorter horizon. A 25-basis-point reduction can free roughly $80 per month on a $500,000 loan.
2. For Renewals:
   Canadians rolling off ultra-low pandemic-era loans will still face larger payments, but stability at sub-5 % levels helps reduce “renewal shock.” Many borrowers are choosing hybrid or 3-year terms to stay flexible for another possible BoC cut in 2026.
3. For Variable Holders:
   Despite the slight increase to 4.27 %, variable products remain competitive for those expecting continued economic slowdown. Borrowers should verify whether their lender’s prime-rate reduction (currently 4.45 %) fully passed through to their payments.

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Expert View

“This is the calm after 18 months of turbulence,” says Janelle Kerr, a mortgage strategist with CanWise Financial. “We’re seeing a rational spread between terms — no panic moves, just normal repricing. Borrowers can finally plan instead of reacting.”

Industry analysts add that further downward movement is possible if CPI inflation stays below 2.5 % into Q1 2026, but few expect dramatic rate slashing. The current levels may instead represent a “soft floor.”

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Why It Matters

• Affordability: Each 0.25 % change in mortgage rate equals ≈ $125 per month difference on a $600,000 loan.
• Economic Signal: Stable fixed rates indicate lenders believe inflation is under control but not collapsing.
• Investor Confidence: Balanced spreads between fixed and variable show improved credit-market functioning, especially after last year’s volatility.

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Canada’s mortgage landscape is stabilizing.
Short-term fixed terms like the 3-year have eased, 5-year rates remain steady, and variable terms tick slightly higher — a sign that the Bank of Canada’s October cut is still filtering through funding markets. For homeowners and buyers alike, November 2025 offers a rare window of predictability in borrowing costs.

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