Canada’s Best 5-Year Fixed Rates Ease to 3.69% for Insured Borrowers

Toronto | 14-Nov-2025, 09:40 EST

Canadian homebuyers received long-awaited good news this week as several lenders brought their 5-year insured fixed mortgage rates down to 3.69%, marking the lowest point seen since the early inflation surge of 2022. Variable insured rates also moved lower, coming in near 3.55%, reflecting reduced funding costs and improved pricing power among lenders.

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A Clear Sign of a Softening Mortgage Market

The move to 3.69% represents more than just a symbolic milestone. This is the first time in more than three years that insured fixed-rate products have dipped below the 3.75% threshold, a level many economists previously believed would remain out of reach until late 2026.

The drivers behind the drop are straightforward:

• Falling bond yields, which directly impact the cost of funding fixed-rate mortgages
• Reduced inflation pressures in September and October
• Increased lender competition, particularly among monoline lenders and broker-channel providers
• The Bank of Canada’s October rate cut, which has influenced consumer expectations and market pricing

The Bank of Canada’s policy rate now stands at 2.25%, and while the central bank has not explicitly committed to further easing, markets are already pricing in one additional cut in Q1 2026. This has pushed lenders to adjust pricing earlier than expected.

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Why Insured Rates Are Dropping Faster

Insured mortgages—where the borrower puts less than 20% down—carry far lower risk for lenders because the mortgage is backed by CMHC, Sagen, or Canada Guaranty.

This lower risk profile creates three pricing advantages:

1. Lower capital requirements for lenders, meaning the mortgage is cheaper to hold.
2. Lower default risk, since insurers cover lender losses.
3. Higher liquidity in the insured mortgage market, allowing lenders to securitize insured mortgages more easily.

Historically, insured spreads compress faster when funding markets improve, and we are seeing the same pattern play out now.

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Who Actually Qualifies for the 3.69% Rate?

Not every borrower can access the newly advertised 3.69% rate. It applies only to borrowers meeting insured-program criteria:

• Down payment must be less than 20%
• Property must be owner-occupied (no rentals)
• Must pass the federal mortgage stress test
• Maximum purchase price limits apply (regional insurer caps)
• Mortgage must be for a purchase, not a refinance

This instantly excludes most refinancers, investors, and homeowners seeking equity takeout. For those groups, rates remain higher—typically in the 4.40% to 4.90% range depending on lender.

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Variable Insured Rates: Now Near 3.55%

Variable-rate mortgages are also shifting, though the movement has not been as sharp as in the fixed-rate space. The current pricing of around prime – 0.70%, yielding 3.55%, is still significantly lower than 2024 levels.

Borrowers renewing variable-rate mortgages that began during the 2020–2021 lows are still facing higher costs than what they originally locked in, but the gap is narrowing.

Market analysts expect one of two scenarios:

• If inflation continues cooling, variables may drop below 3.40% by early spring.
• If inflation resurges, variables could stabilize instead of declining further.

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Impact on Buyers Entering the Market

A drop from 4.50%+ insured fixed rates to 3.69% is substantial. On a typical $600,000 mortgage:

• Monthly payments fall by $150–$230
• Total interest over 5 years drops by $18,000–$27,000
• Stress test becomes slightly easier to pass
• Borrowers gain marginally higher buying power

This relief is especially meaningful for first-time buyers navigating elevated home prices.

In markets like Toronto, Calgary, and Ottawa, late-autumn listings have increased modestly, giving buyers slightly more choice and reducing aggressive bidding seen earlier in the year.

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Risks and What to Watch

Despite the encouraging trend, borrowers should remain cautious of three risks:

1. Volatile Bond Markets

If U.S. inflation surprises higher or global yields rise, Canadian rates could spike again.

2. Limited Window of Discounting

Competitive rate wars among lenders often narrow quickly, especially in December–January when activity slows.

3. Unknown BoC Trajectory

Markets expect one more cut, but the BoC has signalled concerns about wage growth and housing-driven inflation.

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Canada’s mortgage environment is finally showing meaningful improvement for insured homebuyers. With 5-year insured fixed rates at 3.69% and variable insured rates at 3.55%, affordability is improving, even if only gradually. Borrowers preparing to buy or renew should compare lender options now, as this discounting phase may not last long.