Rates checked October 2, 2026 · Prime 4.45%
The lowest 5-year variable mortgage rates in Canada are about 3.44% to 3.45% right now, which is prime minus roughly 1%. Meridian Credit Union and nesto lead the advertised rates. Among the big banks, the best special offers are 3.65% at Scotiabank and on RBC’s insured mortgages.
That makes variable about 1.1 points cheaper than the best 5-year fixed rate. On a $500,000 mortgage, that gap is worth about $26,600 in interest over five years if prime stays where it is. Below you’ll find every rate we checked, the discount behind each one, and a calculator that shows how much prime would have to rise before variable stops paying off.
Best 5-year variable mortgage rates in Canada today
These are the lowest advertised 5-year variable rates we found, from lowest to highest. “Insured” means the rate is for mortgages with default insurance, usually because the down payment is under 20%. Insured mortgages get the lowest rates because the lender carries almost no risk. If you have 20% or more down, expect to pay 0.10 to 0.30 points above the insured rate.
| Lender | Rate | Discount from prime | Mortgage type | What to know |
|---|---|---|---|---|
| Meridian Credit Union | 3.44% | Prime − 1.01% | Advertised | Ontario credit union. Lowest pricing usually needs strong credit and an insured or insurable mortgage. Source |
| nesto | 3.45% | Prime − 1.00% | Insured | Prime minus 1.00%. nesto says its lowest advertised rates apply to insured mortgages of $700,000 to $1,375,000 on homes under $1.5 million. Source |
| Equitable Bank | 3.60% | Prime − 0.85% | Advertised | Sold mainly through mortgage brokers. Source |
| Scotiabank | 3.65% | Prime − 0.80% | Advertised | Big 6 bank. Ask whether the rate needs a Scotia chequing account or other products. Source |
| RBC | 3.65% | Prime − 0.80% | Insured | High-ratio special: RBC Prime minus 0.80%, for purchases with less than 20% down on homes under $1 million. Source |
| Alterna Savings | 3.70% | Prime − 0.75% | Advertised | Ontario credit union. Source |
| First National | 3.70% | Prime − 0.75% | Advertised | Canada’s largest non-bank lender, sold through brokers. Source |
| CMLS Financial | 3.70% | Prime − 0.75% | Advertised | Non-bank lender, sold through brokers. Source |
| Tangerine | 3.90% | Prime − 0.55% | Advertised | Online bank owned by Scotiabank. Variable rates are set as Tangerine Prime plus or minus an adjustment. Source |
| MCAP | 3.90% | Prime − 0.55% | Advertised | Non-bank lender, sold through brokers. Source |
| RBC | 3.95% | Prime − 0.50% | Uninsured | Special offer for purchases and switches: RBC Prime minus 0.50% with a 25-year amortization or less (minus 0.40% for longer amortizations). Source |
| CIBC | 3.95% | Prime − 0.50% | Advertised | Big 6 bank. Source |
| TD | 3.99% | Prime − 0.46% | Advertised | TD variable mortgages move with the TD Mortgage Prime Rate, which is set separately from TD Prime. Check which one is in your contract. Source |
| National Bank | 4.00% | Prime − 0.45% | Advertised | Big 6 bank. Also sells a capped-rate variable mortgage. Source |
| BMO | 4.12% | Prime − 0.33% | Advertised | Big 6 bank. Source |
Rates marked “Advertised” are the best rates each lender shows on Ratehub.ca’s comparison table, which may depend on your province, down payment and mortgage size. Bank special offers can be lower than posted rates, and you can often negotiate further with a strong application.
How a 5-year variable rate is priced: prime minus your discount
Every variable rate in Canada is written as the lender’s prime rate plus or minus a fixed amount. Prime is 4.45% at every big bank today, so a rate of 3.45% is “prime minus 1.00%.”
The part that matters is the discount, because it is locked in for all five years. If prime falls 0.25 points, your rate falls 0.25 points. If prime rises, your rate rises by the same amount. The discount never changes until your term ends.
Why the discount is worth negotiating: on a $500,000 mortgage over 25 years, every 0.10 points of extra discount saves about $27 a month, or roughly $1,600 over the five-year term. The gap between a prime minus 0.75% offer and a prime minus 1.00% offer is about $67 a month.
Two things to check in any offer. First, which prime rate it uses. Most lenders use their own prime, which matches the big banks today, but TD prices its variable mortgages off the separate TD Mortgage Prime Rate. Second, whether the discount depends on conditions such as a 25-year amortization, a minimum mortgage size or another product with the bank. RBC, for example, gives prime minus 0.50% with a 25-year amortization but only prime minus 0.40% if you stretch it longer.
Variable or fixed? Run your own numbers
Pick a rate from the table, enter your mortgage amount and move the slider to test what happens if prime goes up or down. The calculator shows your payment, the interest you would pay over five years compared with a fixed rate, the break-even point and your trigger rate.
Payments are monthly. Variable interest is compounded monthly and fixed interest semi-annually, as Canadian lenders quote them. The prime change is treated as an average over the whole term, which is a simple way to compare scenarios, not a forecast. Insured mortgages are limited to 25 years except for first-time buyers and new builds, which can go to 30.
What the numbers say right now
Here is the default scenario, worked out: a $500,000 mortgage over 25 years, comparing the best insured variable rate with the best insured fixed rate.
| 5-year variable at 3.45% | 5-year fixed at 4.59% | |
|---|---|---|
| Monthly payment | $2,489.73 | $2,792.44 |
| Interest paid over 5 years | $80,585 | $107,180 |
| Balance left after 5 years | $431,201 | $439,633 |
If prime doesn’t move, variable saves about $26,600 in interest and leaves you with about $8,400 less owing at renewal.
Break-even: prime would have to average about 1.1 points higher than today across the whole five years for the fixed rate to come out ahead. A rise that comes late in the term costs less than one that comes early.
Trigger rate: with a fixed payment, this mortgage would stop paying down any principal at about 5.98%, which needs prime to rise roughly 2.5 points.
None of this means variable is the right choice for everyone. It means the starting gap is wide enough that prime would need to climb well above current forecasts before fixed pays off. The question to ask yourself is whether your budget could handle a payment $300 to $400 a month higher if rates did rise sharply, as they did in 2022.
The big-bank gap: why shopping around pays
The difference between the best rate and the highest big-bank rate in our table is 0.68 points (3.44% at Meridian vs 4.12% at BMO). On the same $500,000 mortgage, that works out to:
- $183 more a month at 4.12% ($2,672.43 vs $2,489.73 at 3.45%)
- $16,200 more interest over the five-year term
Advertised big-bank rates are also starting points. Branch mortgage specialists can often match a competitor’s offer, so bring a written quote from a broker or a digital lender to your bank before you renew. If you are switching lenders at renewal, you no longer have to pass the stress test again for an uninsured switch, which makes moving much easier.
Where prime could go next
Prime follows the Bank of Canada’s policy rate, and both have been flat for a year. The Bank cut nine times between June 2024 and October 2025, from 5.00% to 2.25%, then held at 2.25% for seven straight decisions. Prime has sat at 4.45% the whole time.
At the September 2 decision, the Bank pointed to stronger growth and inflation near 3%, driven largely by gasoline prices. Most bank economists expect another hold on October 28, and several now say the next move is more likely to be a hike than a cut, possibly in 2027. That outlook is the main reason fixed rates have drifted up while variable rates have stayed put.
For a variable borrower, the practical read is simple. Today’s savings are real, and further cuts look unlikely in the near term. If you choose variable, pick it for the lower starting rate and the lower penalty, not on a bet that rates will fall.
Adjustable payment vs fixed payment: two kinds of variable
Lenders sell two versions of a variable mortgage, and they behave differently when prime moves.
| Adjustable-rate (ARM) | Fixed-payment variable (VRM) | |
|---|---|---|
| When prime rises | Your payment goes up right away | Your payment stays the same, more of it goes to interest |
| When prime falls | Your payment goes down | More of your payment goes to principal |
| Trigger rate risk | None | Yes, if rates rise enough |
| Who offers it | Most digital lenders and credit unions, plus some banks | Several big banks, including TD and RBC |
An adjustable payment keeps your mortgage on schedule but makes your budget move. A fixed payment feels steadier, but if rates rise a lot you pay down less principal and can hit your trigger rate, at which point the lender will ask you to raise your payment or make a lump-sum payment.
Who gets the lowest 5-year variable rates
- Insured buyers (under 20% down): the lowest rates in the table. Insured mortgages are limited to homes under $1.5 million and a 25-year amortization, or 30 years for first-time buyers and new builds.
- Insurable (20% or more down, home under $1 million, 25 years or less): usually 0.05 to 0.20 points above insured pricing.
- Uninsured (refinances, homes over $1.5 million, amortizations over 25 years with 20% down): the highest rates, often prime minus 0.40% to 0.75%.
You also need to pass the federal stress test, which checks that you could afford payments at the higher of 5.25% or your rate plus 2 points. At a 3.45% rate, you qualify at 5.45%. For a $500,000 mortgage over 25 years, that means showing you can carry about $3,056 a month, not $2,490.
Fine print to check before you sign
- Penalty to break the mortgage. Variable penalties are usually three months’ interest. On a $450,000 balance at 3.45%, that is about $3,880. Fixed-rate penalties can run several times higher because of the interest rate differential.
- Conversion to fixed. Most lenders let you lock in at any time, but only at their own fixed rates on that day, and usually for a term at least as long as what is left on your mortgage.
- Prepayment privileges. Look for at least 15% to 20% a year in lump sums and payment increases. Some of the cheapest rates come with tighter limits.
- Portability. If you might move within five years, check whether the mortgage can move with you.
- Collateral charge. Some banks register the mortgage as a collateral charge, which can make switching lenders at renewal harder or more expensive.
- Which prime rate applies. Confirm the exact prime rate named in your commitment letter.
How we built this comparison
We collected rates on October 2, 2026 from lenders’ own rate pages where they publish them (RBC, nesto and Tangerine) and from Ratehub.ca’s lender table for the rest, then checked the prime rate and Bank of Canada decision against official sources. We list the discount from prime next to each rate because that is the number you keep for five years. Payment figures use monthly payments and Canadian compounding rules: monthly for variable rates, semi-annual for fixed rates. Gizly does not take payment from lenders to appear in this table, and none of the links are affiliate links. We update the rates after every Bank of Canada decision and whenever lenders change their offers.
Building your emergency fund before you buy? See our guide to the best high-interest savings accounts in Canada, or browse more guides in Money.
Frequently asked questions
What is the best 5-year variable mortgage rate in Canada right now?
As of October 2, 2026, the lowest advertised 5-year variable rates are 3.44% at Meridian Credit Union and 3.45% at nesto (prime minus 1.00%, for insured mortgages). The best big-bank rates are 3.65% at Scotiabank and on RBC’s insured mortgages.
Is a 5-year variable or fixed mortgage better in 2026?
Variable starts about 1.1 points lower than the best fixed rate. On a $500,000 mortgage that saves roughly $26,600 in interest over five years if prime holds, and prime would need to average about 1.1 points higher for fixed to win. Fixed is the better fit if you need a payment that cannot change.
What is the prime rate in Canada today?
The prime rate at Canada’s big banks is 4.45%. It has not changed since October 2025, when the Bank of Canada lowered its policy rate to 2.25%.
When is the next Bank of Canada rate decision?
The next decision is on October 28, 2026. Most economists expect the Bank to hold its rate at 2.25%, which would leave variable mortgage rates unchanged.
What does prime minus 1% mean?
It means your mortgage rate is one percentage point below your lender’s prime rate. With prime at 4.45%, prime minus 1% is 3.45%. The 1% discount stays the same for your whole term while prime moves up or down.
What is the penalty for breaking a variable mortgage?
Most lenders charge three months’ interest to break a closed variable mortgage. On a $450,000 balance at 3.45%, that is about $3,880, usually much less than the penalty on a fixed-rate mortgage.
Sources, checked October 2, 2026
Mortgage rates change often and depend on your province, credit, income, down payment and property. Confirm the rate and terms with the lender before you commit. This guide is general information, not financial advice.
