The frequency with which mortgage rates change in Canada depends on the type of mortgage that you have. If you have a variable-rate mortgage, the rate on your loan can change as often as monthly because it is dependent on your lender’s prime rate. When the overnight lending rate set by the Bank of Canada changes, the prime rate follows. Consequently, your mortgage rate changes.
If you have a fixed-rate mortgage, your rate will remain the same throughout your loan term. If you have not yet signed for a loan or are waiting to renew your mortgage, the fixed rate that you may lock in is determined by Canadian government bond prices. When bond prices increase, the interest yield on bonds decreases, which drives down fixed mortgage rates. When bond prices decrease, the interest yield on government bonds increases, driving up fixed mortgage rates. Because fixed rates change as often as bond prices, it is important to lock in your fixed rate as soon as possible so that it does not get any higher before you close your loan.Go back to FAQ