Canada’s Mortgage MarketHolds Steady as 5-Year Fixed Averages 4.69% and Variables Sit Near 4.27%

Vancouver | 15-Nov-2025, 12:40 PM EST —
Canada’s mortgage market opened Friday on a stable footing, with most major lenders maintaining moderate pricing for both fixed and variable terms. According to daily rate trackers, the average 5-year fixed conventional mortgage stands at approximately 4.69%, while the average 5-year variable hovers around 4.27%. These levels represent only mild shifts from early November, suggesting that lenders are taking a cautious but measured approach as economic uncertainty continues to shape rate sheets.

While the headline numbers appear steady, mortgage brokers say the underlying trends tell a deeper story about buyer psychology, bond-market movements, renewal pressures, and lender competition. Canadians are paying closer attention than usual—especially those approaching renewal or considering late-fall purchases.

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Fixed Rates: Stability with a Hint of Upward Pressure

The 5-year fixed average at ~4.69% reflects a week of small—but noticeable—rate adjustments across the big banks, credit unions, and monoline lenders. Earlier in the week, Canadian bond yields spiked due to volatility in U.S. markets and lingering uncertainty around the U.S.–Canada trade standoff. Although yields later eased, lenders widened spreads slightly to hedge against potential swings.

Mortgage specialists note three key drivers:

1. Bond market volatility

The Government of Canada 5-year bond has been moving in a narrow yet choppy band. While the long-term trend remains downward since fall, intraday swings have prompted lenders to keep a small protective cushion.

2. Renewal-heavy season

Thousands of borrowers are entering renewal windows for mortgages originated between 2020–2022. This means lenders are handling higher volumes—and relying more on retention pricing than aggressive discounting.

3. Cautious lender appetite

Some lenders are shifting costs into spreads rather than headline rates, resulting in fixed terms that look stable but behave less competitively beneath the surface.

Even with these pressures, fixed rates remain historically moderate. Borrowers who locked earlier in the fall are still benefiting from the most stable pricing in nearly two years.

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Variable Rates Remain Appealing at ~4.27%

Variable mortgages continue to hold competitive ground. With the Bank of Canada holding its policy rate at 2.25% after the late-October cut, the major banks’ prime rate remains at 4.45%. Spread discounts for variable mortgages have improved slightly since mid-October, helping keep variable averages in the 4.20%–4.35% band.

Three reasons are behind the variable-rate resilience:

1. Spread improvement

Lenders have begun trimming variable-rate spreads to attract new buyers, especially those comparing adjustable vs static payment options.

2. Borrower shift to ARMs

More Canadians prefer adjustable-rate mortgages, which change payment amounts as prime moves. Brokers say these borrowers want transparency over payment shocks.

3. Economic expectations

Markets have priced in modest BoC easing for 2026. While nothing is guaranteed, the sentiment supports variable product demand.

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Borrower Behaviour: Rise in Rate Holds and Short-Term Planning

The biggest behavioural change this month is the jump in 90-and 120-day rate holds. Many households—especially in Ontario and British Columbia—are opting to secure fixed or variable rates early to protect against potential volatility stemming from cross-border economic tensions.

First-time buyers are also modelling affordability scenarios more frequently. Mortgage advisors say clients now regularly ask for:

• “Stress test scenarios at +1% and +2%.”
• “ARMs vs VRMs for 3-year planning.”
• “Renewal impact if bond yields swing again.”

This proactive shift shows Canadians have adapted to the high-rate environment and are building more realistic plans for affordability.

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Quick Rate Snapshot — 15 Nov 2025

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Why It Matters for Borrowers

Even though the averages seem steady, the combination of bond-market fluctuations, renewal waves, and economic uncertainty means Canadians should be more strategic when choosing mortgage products.

Experts recommend:

• Lock a rate early if buying within four months
• Compare fixed vs variable using 12–24 month affordability
• Consider adjustable-rate mortgages for transparency
• Review renewal options months before maturity
• Know your payment triggers if you’re in a static-payment VRM

The right mortgage today depends more on stability and cash-flow comfort than chasing the absolute lowest rate.

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If bond yields settle and the trade environment doesn’t worsen, fixed mortgage pricing may soften by late November. Variable rates should remain attractive into early 2026 unless inflation surprises to the upside.

For now, Canada’s mortgage market sits in a balanced zone—stable but sensitive, cautious but not pessimistic.