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5-year Fixed Mortgage Rates

Canadians with 1-year mortgage term
Canadians with 2-4-year mortgage terms
Canadians with 5 year mortgage terms
Canadians with 6-10 year mortgage terms
Canadians with >10 year mortgage terms

5-year fixed mortgage rate defined

The ‘5’ in a 5-year mortgage rate represents the term of the mortgage, not to be confused with the amortization period. The term is the length of time you lock in the current mortgage rate, while the amortization period is the amount of time it will take you to pay off your mortgage. The term acts like a reset button on your mortgage, at which point you must renew the mortgage at a rate available at the end of the term. So, for example, a typical mortgage has a 5-year term and a 25-year amortization period.

When the mortgage rate is ‘fixed’ it means that the rate (%) is set for the duration of the term, whereas with a variable mortgage rate, the rate fluctuates with the market interest rate, known as the ‘prime rate’. So, for example, if the 5-year fixed mortgage rate is 4%, then you will pay 4% interest throughout the term of the mortgage.

An interesting feature of the 5-year fixed mortgage rate is that all borrowers must meet its standards of approval even if they choose a mortgage with a lower interest rate and shorter term. This benchmark is applied not only to reduce risk for the lender, but to give the borrower some breathing room.

Find a mortgage broker

Mortgage brokers compare mortgages from banks, credit unions, and trust companies, to find the best options for their clients. Because mortgage brokers have access to different financial institutions, they can often negotiate better rates and terms. Big brokerages are also able to negotiate volume discounts that they then pass on to their clients.


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